SOME CONSIDERATIONS ABOUT WAGE COMPENSATORY DIFFERENTIALS THEORY

Marco Antonio Jorge ()
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Marco Antonio Jorge: Universidade Federal de Sergipe (UFS)

Revista de Economia Mackenzie (REM), 2008, vol. 6, issue 6, 66-86

Abstract: The present paper aims to model the Wage Compensating Differentials Theory, expliciting its occurrence conditions. So, the first section presents wage hedonic theory to show market clearing in the presence of differences in agents’ preferences and production tecnologies. It is possible to verify that matching between workers and firms is not randomic and even competitive markets show wage differentials. Following, it analyses the differential sign, noting that this could be negative in the case of expressive risk-lover workers supply simultaneously with a restrict demand for such workers. Lastly, in the third section the consequences of public intervention in the labor market are discussed and it is showed that this could be benefic for the workers in front of assimetric information situations, where they own mistaken perception about the risks they face in their workplaces.

Keywords: Wage hedonic theory; Compensating wage differential; Risk; Labour market; State intervention. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:aft:journl:v:6:6:2008:jan:dec:p:66-86

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