Compensating wage differentials

(bq) part 1 book "labor economics" has contents: introduction to labor economics, labor supply, labor demand, labor market equilibrium, compensating wage differentials, compensating wage differentials.

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Chapter 8 - Compensating wage differentials. In this chapter, students will be able to understand: Relative pay rates across jobs, different wages for identical skills, safety regulation, adequate compensation for unpleasant or risky jobs.

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This theory of the labor market, though widely accepted by economists, is only the beginning of the story. To understand the wide variation in earnings that we observe, we must go beyond this general framework and examine more precisely what determines the supply and demand for different types of labor. That is our goal in this chapter.

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Presumably, the amount of observable discrimination against minorities in wages and employment depends not only on tastes for discrimination, but also on other variables, such as the degree of competition and civil rights legislation. However, aside from the important theory of compensating differentials originated by Adam Smith, and a few major studies like Myr- dal’s American Dilemma [1944], there was little else available in the 1950s to build on to analyze how prejudice and other variables interact. ...

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