Drawing on an unusually large set of employer-employee data, we examine how workers’ pay is related to the educational composition within their occupational group. We find that educational composition as measured by the educational diversity and the educational level of an occupational group is positively related to its workers’ pay within that group. In addition, our findings suggest that the educational level moderates the positive effect of educational diversity, i.e. that pay increases related to diversity are higher in occupational groups with higher levels of education. We also discuss implications for management practice and possible further theoretical developments.