Factors for wage differential within the same occupation, Managerial Economics

Assignment Help:

FACTORS RESPONSIBLE FOR WAGE DIFFERENTIALS WITHIN THE SAME OCCUPATION

i.     Differences in the environment:  For example a doctor sent to North Eastern Province must be paid more than a doctor working in Nairobi to persuade him to go.

ii.    Differences in the cost of living in various areas:  Living costs generally are lower in small towns than in big cities.

iii.   Differences in the price of commodities, which labour produces:  For example, consider two hunters, one hunting elephants and the other rhinos.  Both hunters are equally skilled, but the value of their output differs because the price of elephant tusks is higher than that of rhino horns.  In this case the difference in wages paid to the two individuals will equal the differences in the total value of their output.

iv.    Biological and acquired quality differences:  Human beings are born with different abilities and in different environments, which define largely the opportunities to develop their inherent qualities.  For example, not many people are born with the biological qualities required for becoming successful tennis players or surgeons, writers or artist.  The marginal productivity of workers thus differs.  These differences are called non-equalizing or non-compensating wage differentials because they are due to differences in the marginal production of individuals.

v.     Job Security:  Two people may do the same kind of work for different employers and earn differently if the lower paid person feels safer with present employer.  For example, a doctor may prefer to work in a Government hospital rather than a Private hospital because there is more job security in the civil service.

vi.    Experience:  It is often assumed that if a person does the same job for a long time, he gets experienced and skilled at it.  Hence he is likely to earn more than a person in the same profession who joined more recently.

vii    Paid-by-results jobs:  There are some jobs which pay according to one's output, e.g. jobs of salesmen and insurance agents.  Hence two people may do the same job, and earn differently if one of them works harder.


Related Discussions:- Factors for wage differential within the same occupation

Write about international economic integration, Write about International e...

Write about International economic integration of the Republic of Moldova

Currency swaps, Currency Swaps If the currency of one country is not c...

Currency Swaps If the currency of one country is not convertible, the central banks o f the two countries can exchange their currencies, and the country with the non-convertib

Search theories - a brief'' historical overview, SEARCH THEORIES  -  A BR...

SEARCH THEORIES  -  A BRIEF' HISTORICAL OVERVIEW   A search theory of unemployment is found even in the writings of A. C. Pigou in  the inter-war  period. To explain the  high

Explain discrete-event simulation, Q. Explain Discrete-event simulation? ...

Q. Explain Discrete-event simulation? Discrete-event simulation: Operation of a system is signified as a chronological sequence of events. Every event take place at an instan

Mixed economy, The Mixed Economy There are no economies in the world w...

The Mixed Economy There are no economies in the world which are entirely 'market' or planned, all will contain elements of both systems. The degree of mix in any one econom

Advantages of product differentiation, Advantages of Product Differentiatio...

Advantages of Product Differentiation We can distinguish between those advantages for the firm itself and those for the consumer: a.          For the firm. i.

the occupancy rate of the hospital, In 2006, a hospital with 130 beds had ...

In 2006, a hospital with 130 beds had 8,795 admissions. The average length of stay?for every patient was 4.7 days. Assuming full capacity is 100 percent, detremine the occupancy ra

Foreign exchange markets, Foreign Exchange Markets It is the place whe...

Foreign Exchange Markets It is the place where buyers and sellers meet to negotiate the exchange of different currencies e.g. forex bureaus. Exchange Rates These are

Explain about frequency domain, Q. Explain about Frequency domain? Fre...

Q. Explain about Frequency domain? Frequency domain:   Frequency domain is a term which is used to elucidate the domain for analysis of mathematical signals or functions with

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd