Abstract
An Empirical Study of Fringe Benefits and Wage Compensation Structure Student: Ying-Chun Huang Advisor: Prof. Hwei-Lin Chuang Abstract Both employers and employees have paid more attention on the issue of fringe benefits because of the awareness of workers’ right advocated by worker’s organization and working condition required by law. This can be evidenced by the statistics showing that the percentages of the fringe benefits among total compensation have continuously increased recently. Thus, it is worthwhile to examine the relationship between the fringe benefits and wages compensation. The purpose of this thesis is to analyze empirically whether there is a trade-off between the fringe benefits and wage compensation by applying Heckman’s two-stage procedure on the data drawn from the 1998 wave of the Longitudinal Survey of Health, Work and Income. The main implications of our findings are: (1) there is a trade-off between the fringe benefits and wage compensation. (2) Workers do not seem to take into account of the tax advantage when choosing between the fringe benefits and wages. (3) Only those industries of high profit rates take into account the tax advantage when offering fringe benefits. Others offer fringe benefits for maintaining their profit level. (4) From the individual wage equation of each industry, there is still a trade-off between the fringe benefits and wage compensation.