This document summarizes a study on the relationship between task dispersion within occupations and wage inequality. It finds that occupations with more routine tasks have lower wage dispersion, supporting the first hypothesis. The second hypothesis, that task dispersion within occupations is positively related to wage inequality, receives mixed support, as only non-routine task dispersion seems to matter. The conclusions call for formalizing the intuitions, extending the analysis to other countries, and analyzing changes in task dispersion and wage inequality over time.

1. Within occupation wage inequality and task dispersion
Within occupation wage inequality and task
dispersion
Lucas van der Velde
GRAPE
Group for Research in APplied Economics
April 2016
Spring Meeting of Young Economists

2. Within occupation wage inequality and task dispersion
Table of contents
1 Motivation
2 Task content of occupations
3 Data description
4 Results
5 Conclusions

3. Within occupation wage inequality and task dispersion
Motivation
Evolution of within occupation wage inequality
Notes: Figure taken from Kim and
Sakamoto (2008).

4. Within occupation wage inequality and task dispersion
Motivation
Evolution of within occupation wage inequality
Notes: Figure taken from Kim and
Sakamoto (2008).
“Most of the growth in wage
inequality has been within
occupations, and the SBTC hypothesis
does not explain this phenomenon.”

5. Within occupation wage inequality and task dispersion
Motivation
Is the US case exceptional?
Figure: Wage inequality in selected European countries
Notes: Income corresponds to gross hourly wages.
Data come from Structure of Earning Survey of the EU, 2010.

6. Within occupation wage inequality and task dispersion
Motivation
Introduction
Goal: study the relation between the task content of
occupations and within occupation inequality.

7. Within occupation wage inequality and task dispersion
Motivation
Introduction
Goal: study the relation between the task content of
occupations and within occupation inequality.
Hypotheses
1 Routine intensive occupations are associated with lower wage
dispersion.
2 Dispersion of tasks within occupations is positively related to
within occupation wage inequality.

8. Within occupation wage inequality and task dispersion
Task content of occupations
Theory
Types of tasks
1 Non-routine cognitive, eg. Interpreting data.
2 Non-routine interpersonal, eg. selling, motivating personnel.
3 Non-routine manual, eg. driving, repairing, cleaning.
4 Routine manual, eg. adjusting screws, supervising machines.
5 Routine cognitive, eg. proofreading, bookkeeping.

9. Within occupation wage inequality and task dispersion
Task content of occupations
Theory II
Task content and income inequality
Autor et al. (2003), Acemoglu and Autor (2011), Goos and
Manning (2007), Michaels et al. (2014), Cortes (2016).

10. Within occupation wage inequality and task dispersion
Task content of occupations
Theory II
Task content and income inequality
Autor et al. (2003), Acemoglu and Autor (2011), Goos and
Manning (2007), Michaels et al. (2014), Cortes (2016).
Task content and within occupation income inequality
Handel et al. (2013), De la Rica and Gortazar (2016)

11. Within occupation wage inequality and task dispersion
Task content of occupations
Hypotheses
1 Routine intensive occupations are associated with lower
wage dispersion.
2 Dispersion of tasks within occupations is positively related
to within occupation wage inequality.

12. Within occupation wage inequality and task dispersion
Data description
Operationalizing the variables
The task content of occupations:
Derived from O*NET following Autor et al. (2003), Acemoglu
and Autor (2011), Goos and Manning (2007)
809 occupations in 2008, 954 occupations in 2014.
For example
Task Variables
- Analyzig data / infomation
Non-Routine Cognitive - Thinking Creatively
- Interpreting information for others

13. Within occupation wage inequality and task dispersion
Data description
Operationalizing the variables
The task content of occupations:
Derived from O*NET following Autor et al. (2003), Acemoglu
and Autor (2011), Goos and Manning (2007)
809 occupations in 2008, 954 occupations in 2014.
For example
Task Variables
- Analyzig data / infomation
Non-Routine Cognitive - Thinking Creatively
- Interpreting information for others

14. Within occupation wage inequality and task dispersion
Data description
Measures of wage inequality
American Community Survey 2008 and 2014 (> 1 m.
observations in each year).
Net hourly wages derived from annual earnings.
Different occupation classification: 443 different occupations
in 2008, 456 in 2014.

15. Within occupation wage inequality and task dispersion
Data description
Within occupation inequality
Figure: Between and within components of the Theil index

16. Within occupation wage inequality and task dispersion
Data description
From tasks to wages
Figure: Task content of occupations and wages (2014)

17. Within occupation wage inequality and task dispersion
Results
Hypotheses
1 Routine intensive occupations are associated with
lower wage dispersion.
2 Dispersion of tasks within occupations is positively related
to within occupation wage inequality.

18. Within occupation wage inequality and task dispersion
Results
Building some intuition
Figure: Routine content of occupation and income inequality

19. Within occupation wage inequality and task dispersion
Results
Testing hypothesis 1
We estimate the following regression:
log wage dispersion = α + Tasks β +
where:
- j represent different occupations;
- wage dispersion refers to 90/50 and 50/10 ratios for hourly
wages and residual hourly wages;

20. Within occupation wage inequality and task dispersion
Results
Testing hypothesis 1
Task Index Hourly wages Residual hourly wages
90/50 50/10 90/50 50/10
Non-Routine Cognitive 0.03** 0.03** 0.03** 0.02
(0.01) (0.01) (0.01) -0.01
Non-Routine Personal -0.02* -0.03*** -0.03** -0.03***
(0.01) (0.01) (0.01) (0.01)
Routine Cognitive -0.02** -0.02** -0.02** -0.02*
(0.01) (0.01) (0.01) (0.01)
Routine Manual -0.04*** 0.00 -0.02 0
(0.01) (0.02) (0.02) (0.01)
Non-Routine Physical 0.01 0.01 0.02 0.03**
(0.02) (0.02) (0.02) (0.02)
Observations 455 455 455 455
R-squared 0.73 0.64 0.61 0.62

21. Within occupation wage inequality and task dispersion
Results
Hypotheses
1 Routine intensive occupations are associated with lower
wage dispersion.
2 Dispersion of tasks within occupations is positively
related to within occupation wage inequality.

22. Within occupation wage inequality and task dispersion
Results
Testing hypothesis 2
We estimate the following regressions:
log wage dispersion = α + var(Tasksj ) β +
where:
- j represent different occupations;
- wage dispersion refers to 90/50 and 50/10 ratios for hourly wages
and residual hourly wages;

23. Within occupation wage inequality and task dispersion
Results
Testing hypothesis 2
Hourly wage Residual hourly wage
90/50 50/10 90/50 50/10
Non-Routine Cognitive 0.22*** 0.07 0.19*** 0.05
(0.07) (0.07) (0.06) (0.06)
Non-Routine Personal -0.04 -0.03 -0.06 -0.02
(0.05) (0.05) (0.04) (0.04)
Routine Cognitive -0.02 -0.00 -0.02 -0.00
(0.06) (0.05) (0.05) (0.05)
Routine Manual 0.07 0.07 0.02 0.07
(0.08) (0.08) (0.07) (0.07)
Non-Routine Physical -0.08 0.03 -0.05 -0.00
(0.11) (0.10) (0.09) (0.09)
Observations 98 98 98 98
R-squared 0.59 0.27 0.51 0.33

24. Within occupation wage inequality and task dispersion
Conclusions
What can we say
We employ tools from the task content literature to analyze
wage inequality within occupations.
Evidence supports hypothesis 1: occupations with more
routine content present lower wage inequality.
Evidence in favor of hypothesis 2 is less conclusive. Only
dispersion in non-routine seems to matter.

25. Within occupation wage inequality and task dispersion
Conclusions
What needs to be done
Formalize the intuitions.
Extend the analysis to countries in the EU.
Analyze dynamics of income inequality, eg. changes in the
dispersion vs. changes in task content.

26. Within occupation wage inequality and task dispersion
Conclusions
Goodbye frame
Thank you for your attention

27. Within occupation wage inequality and task dispersion
Conclusions
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