How Nonmonetary Job Amenities Improve with Higher Education

Every high school student will make a very important decision—whether to go to college. Graduating from college provides access to an expanded set of jobs. While it is well known that jobs requiring college degrees typically pay higher wages, how they differ in terms of amenities is less known.

Surely, both the pecuniary (monetary) and nonpecuniary (nonmonetary) benefits of jobs that require a degree impact the decision to enroll in and graduate from college. A student, for example, may choose to drop out or forgo college altogether in favor of a low-paying occupation with valuable amenities.

In this blog post, we examine whether college graduates tend to hold jobs with less-valuable amenities.

Education Level of Workers within Occupations Ranked by Intrinsic Quality

We begin by considering 52 occupations ranked in research by Corina Boar and Danial Lashkari according to their “intrinsic quality,” which reflects a bundle of the most desirable job characteristics.For more on this methodology, see their 2021 National Bureau of Economic Research working paper, “Occupational Choice and the Intergenerational Mobility of Welfare” (NBER Working Paper No. 29381, revised July 2022). The authors identify these characteristics using the General Social Survey, concluding that workers value jobs involving little hand movement or heavy lifting, in which they are treated with respect, learn new things, develop new abilities, perform numerous tasks and are not required to work fast.

Professor, teacher, librarian, curator and scientist are occupations ranking near the top of the list, whereas agriculture worker, mail carrier, food prep worker and bus driver rank near the bottom.

The two figures below use U.S. Census data to depict the representation of different education groups within each occupation. Occupations are ranked left to right by their intrinsic quality. We focus on three education groups: high school graduates, those with some college and college graduates. The first figure reports our results for high school graduates and workers with some college.We restricted our sample to full-time and full-year workers. We excluded respondents who failed to earn a high school diploma or a GED diploma. Thus, the lowest education group consisted of high school graduates. We classified a respondent as having some college if they reported their highest year of schooling as being at least one year of college and they did not report having obtained a bachelor’s degree. The second figure reports our results for college graduates, splitting them into those paid above and below the median wage for all college graduates.We again restricted our sample to full-time and full-year workers. We included respondents who had earned a bachelor’s degree or higher. For a given occupation, employment shares by education group across both figures add up to 100%.

Workers without a College Degree Are More Represented in Occupations with Lower Intrinsic Quality

SOURCES: 2010 U.S. Census data, Boar and Lashkari (2021), and authors’ calculations.

DEFINITIONS OF X-AXIS OCCUPATIONS

The occupations are as follows: 1) postsecondary teacher; 2) librarian, archivist, curator; 3) architect; 4) non-postsecondary teacher; 5) natural scientist; 6) lawyer, judge; 7) social or religious worker; 8) engineer; 9) writer, artist, entertainer, athlete; 10) health diagnostician; 11) therapist; 12) social scientist, urban planner; 13) farm operations or manager; 14) management-related occupations; 15) executive, administrative, managerial; 16) health treatment; 17) other technician; 18) math and computer science; 19) science tech; 20) administrative support; 21) records processing, except financial; 22) police officer, detective; 23) personal services; 24) precision production supervisor; 25) secretary, stenographer, typist; 26) firefighter, fire prevention; 27) sales; 28) engineering and related occupations; 29) guard; 30) financial records processing; 31) adjuster, investigator; 32) health services; 33) health tech; 34) electronics repair; 35) miscellaneous repair; 36) precision production; 37) vehicle mechanic; 38) construction trades; 39) private household occupations; 40) information clerk; 41) computer equipment operator; 42) cleaning and building services; 43) food prep and services; 44) material receiving and distribution; 45) machine operator; 46) forestry, logging, fishing, hunting; 47) extractive; 48) fabricator; 49) nonmanager farm and agricultural; 50) mail distribution; 51) motor vehicle operator; 52) freight, stock and material handler.

As we can see from the figure above, workers without a college degree are greatly represented in occupations with lower intrinsic quality, such as freight, stock and material handling, motor vehicle operation, and forestry, logging, fishing and hunting occupations. Interestingly, workers with some college, compared with high school graduates, tend to be more represented in median-quality occupations, such as health technician or financial records processor.

While the wage premium in the data for workers with some college is small—in our sample, those with some college make $20.66 per hour on average while high school graduates make $17.40 per hour—it appears that exposure to college expands access to better job amenities. This suggests that spending even a couple of years in college accrues an important nonpecuniary benefit, and it may explain why some students enter college but do not graduate.For a discussion of college dropouts, see Lutz Hendricks and Oksana Leukhina’s 2018 paper, “The Return to College: Selection and Dropout Risk,” in International Economic Review.

The next figure depicts occupational employment shares for college graduates split into high- and low-earning groups. The average wages for these two groups of workers are $42.98 per hour and $18.54 per hour, respectively. Note that low-wage college graduates earn similar wages to those with only some college. However, compared with workers who have only some college, low-wage college graduates are much more represented in more desirable occupations (that is, those with better amenities).

College Graduates Are More Represented in Occupations with Higher Intrinsic Quality

SOURCES: 2010 U.S. Census data, Boar and Lashkari (2021), and authors’ calculations.

DEFINITIONS OF X-AXIS OCCUPATIONS

The occupations are as follows: 1) postsecondary teacher; 2) librarian, archivist, curator; 3) architect; 4) non-postsecondary teacher; 5) natural scientist; 6) lawyer, judge; 7) social or religious worker; 8) engineer; 9) writer, artist, entertainer, athlete; 10) health diagnostician; 11) therapist; 12) social scientist, urban planner; 13) farm operations or manager; 14) management-related occupations; 15) executive, administrative, managerial; 16) health treatment; 17) other technician; 18) math and computer science; 19) science tech; 20) administrative support; 21) records processing, except financial; 22) police officer, detective; 23) personal services; 24) precision production supervisor; 25) secretary, stenographer, typist; 26) firefighter, fire prevention; 27) sales; 28) engineering and related occupations; 29) guard; 30) financial records processing; 31) adjuster, investigator; 32) health services; 33) health tech; 34) electronics repair; 35) miscellaneous repair; 36) precision production; 37) vehicle mechanic; 38) construction trades; 39) private household occupations; 40) information clerk; 41) computer equipment operator; 42) cleaning and building services; 43) food prep and services; 44) material receiving and distribution; 45) machine operator; 46) forestry, logging, fishing, hunting; 47) extractive; 48) fabricator; 49) nonmanager farm and agricultural; 50) mail distribution; 51) motor vehicle operator; 52) freight, stock and material handler.

Our findings suggest that even if college degrees do not pay off financially, as appears to be the case for lower-wage college graduates, they likely make up for it in terms of job amenities. Since job amenities improve with education level, they provide an additional reason for college enrollment.

Worker Education Level and Task-Based Occupation Ratings

An alternative and, perhaps, more transparent way to characterize the nonpecuniary nature of an occupation is by describing the extent to which it involves manual, routine and abstract tasks. Manual tasks generally require physical labor. Routine tasks involve repetitive work. Abstract tasks are complex and involve communication and problem-solving.

We follow the classification in research from David H. Autor and David Dorn, in which they employ the U.S. Department of Labor’s Dictionary of Occupation Titles dataset (superseded by O*NET) to assign three ratings to an occupation, each corresponding to the intensity of engaging in one of the types of tasks.For more on this methodology, see their 2013 American Economic Review paper, “The Growth of Low-Skill Service Jobs and the Polarization of the U.S. Labor Market.” These task-based occupational ratings are given on a scale between one and 10.

Once again, we use U.S. Census data to focus on the three education groups. Because we observe the occupation of each worker, we can assign three task-based ratings to each worker. In other words, we can infer how workers allocate their time across the three types of tasks based on their occupation. We report three average task-based ratings for each education group in the following figure.

Higher Education Levels Are Associated with Occupations that Require Abstract Skills

SOURCES: 2010 U.S. Census data, Autor and Dorn (2013), and authors’ calculations.

NOTES: We restricted our sample to full-time and full-year workers. We excluded respondents who failed to earn a high school diploma or a GED diploma. Thus, the lowest education group consisted of high school graduates. We classified a respondent as having some college if they reported their highest year of schooling as being at least one year of college and they did not report having obtained a bachelor’s degree. In our definition of college graduates, we included respondents who had earned a bachelor’s degree or higher.

The figure indicates that more education is associated with more time allocated to abstract tasks and less to routine and manual tasks.

We see the greatest change, however, between those with some college and college graduates. While workers with some college spend 33% of their time engaging in abstract tasks, college graduates spend 50% of their time on abstract tasks. Therefore, if students would prefer to engage in creative and abstract tasks throughout their careers, they might choose to enroll in college partly for that reason.

Notes

1. For more on this methodology, see their 2021 National Bureau of Economic Research working paper, “Occupational Choice and the Intergenerational Mobility of Welfare” (NBER Working Paper No. 29381, revised July 2022).
2. We restricted our sample to full-time and full-year workers. We excluded respondents who failed to earn a high school diploma or a GED diploma. Thus, the lowest education group consisted of high school graduates. We classified a respondent as having some college if they reported their highest year of schooling as being at least one year of college and they did not report having obtained a bachelor’s degree.
3. We again restricted our sample to full-time and full-year workers. We included respondents who had earned a bachelor’s degree or higher.
4. For a discussion of college dropouts, see Lutz Hendricks and Oksana Leukhina’s 2018 paper, “The Return to College: Selection and Dropout Risk,” in International Economic Review.
5. For more on this methodology, see their 2013 American Economic Review paper, “The Growth of Low-Skill Service Jobs and the Polarization of the U.S. Labor Market.”