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

Wage determination, WAGE DETERMINATION, POLICY AND THEORIES Wages and ...

WAGE DETERMINATION, POLICY AND THEORIES Wages and salaries are rewards to labour as a factor of production of goods and services.  In ordinary speech a distinction is frequent

Limits on the process of bank deposit creation, Limits on the process of ba...

Limits on the process of bank deposit creation On the demand side , there may be a lack of demand for loans, or at least of borrowers who are sufficiently credit worthy .

Write the techniques of managerial economics, Techniques of Managerial Econ...

Techniques of Managerial Economics Managerial economics draws on a wide range of economic tools, concepts and techniques in decision-making process. These concepts can be cons

Factors influencing supply curve - goals of the firm, Goals of the firm ...

Goals of the firm How much is produced by a firm depends on its objectives.  A firm which aims to maximise its sales revenue, for example, will generally supply a greater quant

Determine the market demand curve, Determine the Market demand curve Ma...

Determine the Market demand curve Market demand curve is the horizontal summation of individual demand curves. The individual demand schedules plotted graphically and summed up

Advantages of the mixed economy, Advantages of the Mixed Economy Neces...

Advantages of the Mixed Economy Necessary services are provided in a true market economy, services which were not able to make profit would not be provided. Incentive:  Sin

Balance of payments, BALANCE OF PAYMENTS The Balance of Payments of a ...

BALANCE OF PAYMENTS The Balance of Payments of a country is a record of all financial transactions between residents of that country and residents of foreign countries.  (Resi

Types of elasticity, what are the examples of the types of elasticity (pri...

what are the examples of the types of elasticity (price,income & cross elaticity

Structural unemployment, a)      In 1948, the money GNP was $520 billion an...

a)      In 1948, the money GNP was $520 billion and the price index was 120.  In order to   make the 1948 GNP comparable with the base year, the 1948 GNP must be adjusted    to:

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