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 http://www.bls.gov/opub/ted/1999/oct/wk1/art02.htm (visited December 01, 2015).
Recent editions of Spotlight on Statistics
Fifty years of looking at changes in peoples lives
Longitudinal surveys help us understand long-term changes, such as how events that happened when a person was in high school affect labor market success as an adult.
- A look at pay at the top, the bottom, and in between
The Spotlight examines how earnings and wages have changed over time and how they differ within a geographic area, industry, or occupation.