Occupational and Organizational Effects on Wages among College-educated Workers in 2003 and 2010

Abstract

We investigate the 2003 and 2010 National Survey of College Graduates to study the effects of education, job matching, employer characteristics, and occupation on wage inequality among college-educated workers. Various measures of workers’ bargaining power are considered in conjunction with indicators of employers’ rents. These organizational variables have been mostly ignored in recent research that has emphasized three-digit occupational codes. After controlling for organizational variables, our findings indicate that the incremental R² uniquely attributable to occupation is small and increased only slightly between 2003 and 2010. As a proportion of the total explained variance, the component attributable to occupation actually declined. By contrast, after controlling for occupation, the incremental R² attributable to organizational variables increased more substantially. Our results imply that wage inequality among college-educated workers is now more directly affected by employee bargaining power and employer rents than by occupation.