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I think what you'll find is that industries that use knowledge workers tend to have higher variance than those that don't; industries that have a high percentag
by eindiran 8y ago
I think what you'll find is that industries that use knowledge workers tend to have higher variance than those that don't; industries that have a high percentage of wages come from incentive pay will have a greater variance than industries that don't use incentive pay; and industries that are heavily regulated or unionized will have lower variance than industries that are lightly regulated or unionized.
Incentive pay: for example, sales people and wait staff have a highly variant distribution based on commission and tips respectively.
Knowledge workers: software engineers have an extremely high variance wage distribution.
High-regulation industries: mining is highly regulated and is unionized, leading to a very low degree of variance in wages between miners.
There are exceptions to this and the categories can interact in interesting ways:
For example, medicine is highly regulated but they are knowledge workers, so there is reasonably high variance in wages, particularly for doctors (relative to other health professionals).
Another interesting effect is that highly unionized industries can see significant variance, but it is controlled almost exclusively by seniority within the union. Controlling for seniority, the variance in these industries tends to disappear.
This is an interesting paper on the subject that provides some pretty compelling evidence for the regulation and incentive pay claims: https://www.bls.gov/opub/mlr/1981/04/art5full.pdf https://www.bls.gov/opub/mlr/1981/04/art5full.pdf