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.
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).
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Knowledge gets the biggest pay premium on the Internet at https://www.bls.gov/opub/ted/1999/oct/wk1/art02.htm (visited August 11, 2020).
Recent editions of Spotlight on Statistics
- Using BLS Data to Match People with Disabilities with Jobs Presents data that can help increase access and opportunity for people with disabilities in the nation’s labor market.
- How Women and Aging Affect Trends in Labor Force Growth Examines how women’s labor force participation and the aging of the U.S. population affect trends in labor force growth.
- Meal Appeal: Patterns of Expenditures on Food away from Home
Examines spending on food away from home, such as meals or snacks from restaurants, vending machines, employer cafeterias, or other venues.
- Job Flexibilities and Work Schedules in 2017–18
Examines data on job flexibilities, such as working at home, flexible schedules, and shift work.