DR@W

Compensating wage differentials that employees demand for doing a particular job depend on the job’s characteristics. Via a series of experiments, we seek to demonstrate that compensating wage differentials can be predicted by individuals’ subjective time perceptions: the shorter participants perceive time spent on a task to be relative to objective time -- the subjective/objective time ratio, or “SOT” -- the lower is the wage that they demand for that task and the more productive they are at performing the task. By varying task enjoyment exogenously within-subject while holding all other task characteristics constant, we aim to establish that task enjoyment causes the variation in SOT and compensating wage differentials. We interpret this as evidence that SOT constitutes an objective measure of non-pecuniary utility derived from a task. We anticipate that SOT correlates with self-reported task enjoyment and predicts compensating differentials better than self-reports. This would suggest that SOT captures components of wage demands that are not readily accessible by conscious introspection. Importantly, because the passage of time has a well-defined objective scale, unlike self-reported task enjoyment, it is not impacted by scale use differences between respondents. Our work establishes subjective time measurements as a novel indicator relevant to economists and psychologists, which provides an alternative way for measuring preferences and enriches our understanding of task utility.