Over the past two decades, the American job market has undergone a profound transformation that goes far beyond the numbers on a typical payslip. While workers are earning higher real wages on average, their day-to-day work experience has become faster-paced and more mentally demanding.
Our recent work shows that while the modern labour market offers employees more independence over how they do their jobs, the jobs they do tend to be much more stressful. This shift in workplace conditions is reshaping the landscape of economic inequality, showing that a focus only on salaries fails to capture how much wellbeing varies among working people.
The evolution of stress: 18 years of US labour market data
To understand how workplace conditions are changing, we combine two datasets that track employment trends and job descriptions across 481 distinct occupations in the United States from 2008 to 2025. Drawing on information from O*NET – a dataset that analyses specific features of daily work – our study measures three essential elements of occupational health: psychological stress, decision-making freedom and physical strain.
The findings show a clear trend. The American labour market is moving away from manual labour and towards roles that are psychologically intense but offer greater independence. Over the 18-year period we study, the average mental workload and stress levels in American workplaces grew steadily.
But this change did not happen because people changed careers or moved from low-stress industries into high-stress sectors. Instead, our research reveals that nearly all of this shift occurred within existing jobs. A secretary, a teacher or a software engineer today faces a much heavier mental workload and higher pressure than someone in the exact same role did in 2008.
At the same time, the amount of independence – or what we call ‘decision latitude’ – that workers have in their jobs has risen. This means that employees generally enjoy more freedom to plan their schedules, solve problems and choose their methods than they did in the past.
Physical demands, on the other hand, show no trend across the entire population. But this stability hides a stark division between genders. While men have successfully shifted into less physically demanding positions over time, women have seen the physical strain of their employment remain flat or even increase slightly.
Work and wellbeing: a hidden inequality
Workplace environments directly affect human health and wellbeing. To measure how much these conditions matter to employees, our study uses a flexible economic framework that observes actual human choices – specifically, choices between jobs with different levels of psychological demands, decision latitude, physical demands and pay.
By tracking the frequency and ‘direction’ (for example, from a less stressful job to a more stressful one, or vice versa) of workers’ job switches, we can calculate how much money people are willing to sacrifice to secure a better work environment.
The results reveal that workers’ preferences have shifted dramatically over the last decade. Before 2018, people did not show a strong collective aversion to high-stress jobs. But from 2019 onwards, there has been a dramatic shift. Today, the average worker requires a substantial salary increase to accept a position with a higher mental strain.
At the same time, people place an increasingly high value on having independence in their jobs. In fact, employees are willing to give up a substantial fraction of their potential earnings just to secure greater freedom and choice in their daily tasks.
But the central problem is that the job market does not naturally compensate people for these specific job attributes. In a perfectly balanced world, a person working in a highly stressful job would receive a higher salary to make up for the strain. Conversely, workers should accept a lower salary to work on a job with a high level of decision latitude (as this is a job attribute that they value).
Those patterns are what the classical economic theory of ‘compensating wage differentials’ would predict. Yet, our research shows that these compensations do not exist, at least in the United States. People in high-stress roles do not receive any extra salary for the psychological burden that they carry. Conversely, roles that grant workers more freedom also happen to pay higher salaries, giving those employees a double benefit.
This mismatch means that traditional measures of income inequality are missing the true picture. When we combine wages with measured psychological values of workplace conditions into a single metric of overall wellbeing, inequality looks completely different. While standard wage gaps have remained relatively flat since 2008, inequality in overall wellbeing has expanded significantly over that period. This widening gap is driven primarily by unequal access to workplace independence.
This dynamic also distorts the progress made towards gender equality. Although the gender wage gap narrowed steadily between 2008 and 2022, the ‘true’ gap in wellbeing between men and women has not improved. Because men show a much stronger preference for independent roles and are willing to sacrifice more salary to get them, they capture a disproportionate share of the benefits from the rise in decision latitude in the modern workplace.
As a result, when factoring in daily health and job conditions, the overall wellbeing gap between men and women is much wider than the wage gap alone suggests – and it does not show signs of going in the right direction.
How should policy-makers respond?
These findings suggest some consequences for economic and social policy. Because structural shifts in the economy alter the mental and physical health demands of daily work, policy-makers must look beyond wages when designing support systems. At the very least, government initiatives should integrate workplace health metrics into official labour statistics to help to identify vulnerable sectors before widespread health crises emerge.
It is also likely that career training programmes need to adapt. The traditional approach to training focuses on technical skills. Future programmes should also prepare workers for the high-stress, self-directed environments of the modern economy, ensuring that people can manage greater professional independence without suffering from extreme mental strain.
These findings also have consequences for the social safety net. For a typical worker, losing their job does not just mean losing income: it also means losing the stress and decision latitude level of their old job and running the risk of a ‘mismatch’ in their future role, with potential health consequences. Social safety nets should help to protect people from these hidden health costs, ensuring a fairer distribution of wellbeing across the entire workforce.
