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Knowledge gets the biggest pay premium

October 05, 1999

The wage premium for knowledge is higher than other factors. On average, wages go up about 10-15 percent as knowledge requirements go up one level and all other factors of the job are fixed.

Maximum wage premia accruing to greater job duties, 1998
[Chart data—TXT]

The premiums for working more independently (less supervision and less reliance on detailed guidance) are on the order of 7-10 percent per level. There are less substantial premiums for the factors of complexity, scope, and effect of the work and for supervisory duties. There are only negligible premiums for measures of personal interaction on the job and for the physical aspects of the job.

In sum, the duties most highly valued by the marketplace are generally cognitive or supervisory in nature. Job attributes relating to interpersonal relationships do not seem to affect wages, nor do the attributes of physically demanding or dangerous jobs.

These results are based on analysis of data from the National Compensation Survey. The chart shows the largest wage differential between jobs at the lowest level of the job attribute and jobs at higher levels of the attribute. For more information see Chapter 2 of the Report (PDF 1,037K).

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Knowledge gets the biggest pay premium on the Internet at http://www.bls.gov/opub/ted/1999/oct/wk1/art02.htm (visited October 21, 2014).

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