Work Hours and Amenity Trade-offs
We study amenity subtitution when jobs offer multiple amenities
AEA Papers & Proceedings, forthcoming
Abstract: We examine whether workers who place a higher value on specific job amenities are more likely to receive them in exchange for lower wages. While the classic compensating differentials model (Rosen, 1986) suggests they would, we show that when multiple amenities are considered together, the trade-offs become more complex. We develop a model that accounts for complementarity and substitutability in firms’ amenity offerings and workers’ preferences. Using data from the NLSY97, we find that shorter or more flexible work hours are often traded for other benefits, shaping gender disparities in wages and job amenities.