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

Caselet 1, Plot the demand schedule and draw the demand curve for the data ...

Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case.

Rainfall and evapotranspiration values, If the landfill described in Exampl...

If the landfill described in Example had a compacted density of 600 Kg/m3 a refuse  depth of 9 m (29.5 ft), a moisture content of 20% by volume, and a 1-m  (3.25-ft)-thick clay cov

Causes for diseconomies of scale, Q. Causes for diseconomies of scale? ...

Q. Causes for diseconomies of scale? The most significant cause for diseconomies of scale is the diminishing returns to management. As the output grows beyond certain level the

Disadvantages of progressive tax, Disadvantages The effect on ince...

Disadvantages The effect on incentives High  progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk

Problems of prices and incomes policy, Problems of prices and Incomes polic...

Problems of prices and Incomes policy i. Confrontation The imposition of the prices and incomes policy, voluntary or statutory, risks the possibility of confrontation w

Cost, classification of costs

classification of costs

Capital recovery factor, The owner of a patent has a contract with a cooper...

The owner of a patent has a contract with a cooperation that gives it right to use the patent. The cooperation will pay the patent owner $2500 yearly for the next 5 years, $3000 fo

What is internal diseconomies of scale, Q. What is Internal Diseconomies of...

Q. What is Internal Diseconomies of Scale? Internal economies of scale exist only up to a certain size of the plant. Size of plant is called the optimum plant size since with t

Inflation, Meaning The word inflation has at least four meanings. ...

Meaning The word inflation has at least four meanings. A persistent rise in the general level of prices, or alternatively a persistent falls in the value of money.

Accomplish the desired outcome, Suppose that the present level of income in...

Suppose that the present level of income in the economy is $700 billion. It is determined that in order to decrease the unemployment rate to the desired level, it will be essential

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