Events

Professor Anders Humlum
Assistant Professor of Economics
University of Chicago

We study wage and amenity tradeoffs among job movers using a large-scale survey linked to administrative data in Denmark. Although 35% of job movers experience pay decreases, only 12% report downgrades in overall job quality. Moves with larger pay increases are associated with greater flexibility, less physical demands, and better benefits—but also more hours, faster work pace, higher layoff risk, and more stress. Eliciting workers’ reservation wages to return to their prior jobs, we estimate that non-wage amenities offset roughly half of the gains from pay increases. These correlations are strongest for voluntary movers and for men and older workers, groups with greater scope for trading wages against amenities. They persist among movers between the same pair of firms, and wage changes across the firm pay distribution overstate changes in job value by a factor of two. Because workers value a broad set of job characteristics and sort on private tastes uncorrelated with wages, pay alone is a poor proxy for whether workers are climbing or falling down the job ladder.