Chapter8 - IIIC Causes edit Master subtitle style Click...

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Click to edit Master subtitle style IIIC Causes of Earning Differences: Compensating Differentials
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In this chapter we will learn What are compensating differentials? How do they explain the gender earnings gap? Evidence
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What are compensating differentials ? portion of wage difference due to job characteristics that are either “good” (desirable) or “bad” (undesirable) positive compensating differentials compensate for “bad” characteristics increase the wage negative compensating differentials compensate for “good” characteristics
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Some possible "good" characteristics status clean environment good benefits possibility of overtime flexibility of hours rewarding work Some possible ”bad" characteristics stigma low probability of success high risk of injury unpleasant environment high probability of layoff dealing with unhappy people
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Problem: Some characteristics may be good or bad, depending on individuals working with people, children swing shift working indoors/outdoors challenge vs. monotony trav el autonomy vs. heavy supervisi on
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if women are more likely to choose jobs with negative compensating differentials (clean and safe working conditions, flexible hours, rewarding work) lower wages if men are more likely to choose jobs with positive compensating differentials higher wages Do men and women differ in PREFERENCES for job characteristics?
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Chapter8 - IIIC Causes edit Master subtitle style Click...

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