Valuing business impacts in the areas of wage inequality and employee well-being
This working paper proposes a methodology to monetise five aspects of employee well-being
(wage inequality, being employed, excess working hours, relationships with management
and job security) using theoretical and empirical frameworks drawn from welfare economics.
Preliminary results highlight a large loss of welfare arising from within-firm wage
inequality as well as a strong impact of working conditions on workers’ well-being.
On the aggregate, suppressing the negative externalities of the firm linked to excess
working hours, tensions with management and job insecurity would yield an increase
in social welfare equivalent to a 25% increase in household income, representing many
years of economic growth. Greater transparency on company wage distributions and working
conditions is necessary to apply these methodologies to real firms.
Published on June 08, 2023
In series:OECD Papers on Well-being and Inequalitiesview more titles