What are the types of wage differential?
Top 5 Causes of Wage Differentials – Explained!
- Occupational Differences:
- Inter-firm Differentials:
- Regional Differences:
- Inter-Industry Differences:
- Personal Wage Differences:
What are the factors of wage differentials?
The causes of wage differentials are as follows:
- Nature of Employment.
- Profitability of Success.
- Training and Education.
- Security and Stability of Employment.
- Geographical Differences.
- Market Imperfection.
- Responsibility and Accountability of a Job.
- Strong and Organised Trade Union.
What is wage rate differential?
Wage differential is a term used in labour economics to analyze the relation between the wage rate and the unpleasantness, risk, or other undesirable attributes of a particular job.
What is meant by compensating wage differentials?
Compensating wage differentials arise to compensate workers for nonwage characteristics of the job (i.e. how ‘pleasant’ or ‘unpleasant’ a job is). – If a job is unpleasant, the firm must probably offer a higher wage to attract workers and vice versa.
What are compensating wage differentials give examples?
Wage differentials observed in the labor market are often compensating wage differentials. For example, coal miners, deep sea divers, and security guards are likely to be paid higher wages than similar jobs due to the hazardous nature of their duties.
What is equilibrium wage differential?
The equilibrium wage differential is that of the last worker hired (the marginal worker). It is not a measure of the average dislike for risk among workers in the labour market. Therefore, all but the marginal worker are overcompensated by the market!
Why wage differentials exist within the same occupation?
There are also wage differentials across occupations, because of differences in the demand and supply of laborers for particular jobs or occupations. These differences arise primarily because of differences in the amount of education or training required and in the desirability of the job itself.
What is inter industry differential?
patterns and possible sources. Data from the Occupational Employment Statistics survey. are used to investigate wage differences among industries. and reveal that occupations that are most closely related.