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

Long run output, LONG RUN OUTPUT In the LR whether or not the firm mak...

LONG RUN OUTPUT In the LR whether or not the firm makes profit will depend on the conditions of entry.  For example, when surplus profits exist, there will be new entrants bec

Determine that the laws of economics still work today, (i) Do the laws of e...

(i) Do the laws of economics still work today? (use the case discussed in class to answer this question or any other examples) (ii) Provide examples of three factors that can sh

Short run cost curve, Ajax has the following short run cost curve when tc=8...

Ajax has the following short run cost curve when tc=800000-5000Q+100Q2

Williamson model of managerial discriation, how equilibrium output can be...

how equilibrium output can be find in williamson model

1, critically analyze the firm''s theory of profit maxmization

critically analyze the firm''s theory of profit maxmization

Disguised unemployment, Disguised unemployment Situation where some pe...

Disguised unemployment Situation where some people are employed apparently, but if they are withdrawn form this job, total production remains the same. In most developing coun

State the market demand curve, The Market Demand Curve Quantity of a co...

The Market Demand Curve Quantity of a commodity that an individual is willing to buy at a particular price of the commodity during a specific time period, given his money incom

Advantages of indirect taxes, Advantages a. They are less costly to ...

Advantages a. They are less costly to administer because the producers and sellers themselves deposit them with the government. b. If levied on goods with inelastic deman

Comparability principle, The comparability principle Associations repre...

The comparability principle Associations representing workers providing services - clerical, postal, teaching, etc. - have always attempted to  apply the "principle of comparab

Theory of demand, when the data is descrete and incremental changes is meas...

when the data is descrete and incremental changes is measurable, what is it?

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