The Occupational Structures of Low- and High-Wage Service Sector Establishments

43 Pages Posted: 23 Sep 2018

See all articles by Eliza Forsythe

Eliza Forsythe

University of Illinois at Urbana-Champaign

Date Written: August 15, 2018

Abstract

The occupational structure of an establishment provides a description of its production process by detailing the distribution and relative intensity of tasks performed. In this paper, I investigate whether there are substantive differences in the occupational structures of low- and high-wage service sector establishments. I show that low-wage establishments organize production to use less labor in professional occupations compared to high-wage establishments operating in the same local-labor market and industry. In addition, low-wage establishments employ fewer individuals in information technology occupations, employ fewer managers, and have substantially wider supervisory spans of control. These results indicate that, despite operating in the same narrowly defined labor and product markets, low-wage establishments organize production to less intensively use labor in skilled occupations.

Keywords: Occupations, Wage Inequality, Organization of Production, Service Industry

JEL Classification: J23, J31, L23

Suggested Citation

Forsythe, Eliza, The Occupational Structures of Low- and High-Wage Service Sector Establishments (August 15, 2018). Available at SSRN: https://ssrn.com/abstract=3243852 or http://dx.doi.org/10.2139/ssrn.3243852

Eliza Forsythe (Contact Author)

University of Illinois at Urbana-Champaign ( email )

601 E John St
Champaign, IL 61820
United States

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