Research Findings

Field of work determines pay, and increasingly so


August 27, 2018

Sociologists have traditionally considered occupation—field of work—a central factor in differentiating people’s life chances. This post summarizes new research reinvigorating sociology’s preoccupation with occupation. It suggests that field of work is a critical factor determining pay, and increasingly so, and that this is the case because different occupations involve different tasks.

Occupational tasks and wages

For a number of years now, I have been studying how occupation relates to pay in the United Kingdom. In this research, I have found that occupations have become a stronger predictor of earnings since the 1970s such that occupations explain the majority of wage inequality and its growth in the United Kingdom. Moreover, this trend has shown no sign of reversal even with the wage stagnation of the last decade.

But how might we explain the connection between field of work and pay, and why the connection might be evolving? An exciting new approach examines the task content of occupations.

At the heart of this idea is that pay is attached to particular types of tasks: Different tasks command different rates of pay in the labor market. Since tasks are differentially bundled together across occupations, some occupations pay more than others.

Since the value of tasks is not constant, this approach might also explain why some occupations’ wages rise faster than others. For instance, sociologists Liu and Grusky examined the growth in wage inequality in the United States and found that occupational tasks explain most of the rise in between-occupation inequality there.

A compelling explanation is technological change. Technology complements certain non-routine tasks, disproportionately increasing the productivity and wages of occupations featuring those tasks relative to occupations which involve more routine tasks that are easily automated.

There are at least two open questions with the task-based approach:

  • Empirical tests have been restricted to a limited set of tasks. There are many sorts of tasks whose relationship to technological developments is far from clear. The non-routine category, for instance, includes various kinds of interactive, organizational, and affective tasks—all of which are known to be growing in a service-dominated economy. What is the relationship between this full range of tasks and pay?
  • If it is tasks that explain variation in wages, do we need to look at occupations? Why not just examine tasks for specific jobs?

My recent research with Thijs Bol (University of Amsterdam) addressed both these issues using the Skills and Employment Survey, a nationally-representative survey of workers in Britain. First, we examined a broader range of tasks than is normally considered, eleven broad types to be exact (verbal, numeracy, problem-solving, computer-use, manual, professional communication, client communication, self-planning, managerial, aesthetic, and emotional). Second, we had task information for specific jobs.

Regarding the first question, our results found that some technology-related occupational tasks have counterintuitive effects on wage inequality. For instance, while problem-solving tasks straightforwardly increase inequality (that is, benefit the higher-paid the most), computer-use tasks actually reduce inequality (that is, benefiting both the lower- and higher-paid equally).

Furthermore, technology-related tasks (verbal, numeracy, problem-solving, computer-use, and manual) accounted for 35.6% of the explained variance in wages between occupations, while other tasks whose relationship with technology is less straightforward (professional communication, client communication, self-planning, managerial, aesthetic, and emotional) accounted for a similar amount (34.1%).

Regarding the second question, we found that within occupations, job-level tasks add very little extra to the story, so focusing on occupations is justified.

Occupationally differentiated job quality

Occupational tasks are likely not the only factor in understanding why some occupations pay more than others. Occupational institutions also matter. For instance, sociologists Bol and Weeden found occupational licensing raises wages for incumbents net of occupational tasks.

More generally, occupational position is likely also important for job quality defined more broadly than just pay. My recent research with Ying Zhou (University of Surrey) found that occupational tasks determine how you’re paid (payment systems) and recent research with Maria Koumenta (Queen Mary, University of London) similarly found that occupational tasks determine the use of precarious forms of flexible working.

Conclusions

We are only beginning to understand how and why job quality varies according to occupational position. There is real potential for this approach to inform policy—for instance, in mapping particular labor market segments which are vulnerable to low pay or precarious forms of flexible working because of their occupational tasks.

Reinvigorating an occupational approach has the potential to improve our understanding of labor market inequalities and to help us combat these inequalities.


Read More

Mark Williams and Thijs Bol, “Occupations and the Wage Structure: The Role of Occupational Tasks in Britain,Research in Social Stratification and Mobility, 2018.

Image: Wikimedia Commons


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