compensating differentials


Median salaries of Ph.D’s are substantially higher for those in
nonacademic employment that for those employed by colleges and universities,
even after salaries paid on an academic year basis are adjusted upward to a
full-year basis. The differences can be seen both in cross—section estimates
for 1987 and in fixed effect estimates based on data for Ph.D's who changed“
sectors between 1985 and 1987. The most likely explanation of these
differences is that they are compensating differentials reflecting the
advantages of academic employment, including greater autonomy and (for those
with tenure) greater job security.

Year of Publication
Date Published
Publication Language
Citation Key
The Journal of Economic Perspectives,Vol. 7, No. 1 , Winter 1993
Rees, A. (1991). The Salaries of Ph.D’s in Academe and Elsewhere. Retrieved from (Original work published June 1991)
Working Papers

In a labor market in which firms offer tied hours-wage packages and
there is substantial dispersion in the wage offers associated with a
particular type of job, the best job available to a worker at a point in
time may pay well but require an hours level which is far from the worker's
labor supply schedule, or pay poorly but offer desirable hours.
Intuitively, one would expect hours constraints to influence the pattern of
wage-hours tradeoffs which occur when workers quit to new jobs. Constrained
workers may be willing to sacrifice wage gains for better hours. Likewise,
workers may accept jobs offering undesirable hours only if the associated
wage gains are large. We investigate this issue empirically by examining
whether overemployment (underemployment) on the initial job increases
(reduces) the partial effect on the wage gain of a positive change in hours
for those who quit. We also examine whether overemployment
(underemployment) on the new job increases (reduces) the partial effect on
the wage gain of a positive change in hours for those who quit. Despite the
limitations imposed by small sample sizes and lack of information on the
magnitude of hours constraints, our results support the view that an
individual requires compensation to work in jobs which, given the
individual’s particular preferences, offer unattractive hours.

Year of Publication
Date Published
Publication Language
Citation Key
Journal of Labor Economics, Vol. 6, No. 2, (April, 1988
Paxson, C., & Altonji, J. (1987). Labor Supply Preferences, Hours Constraints, and Hours-Wage Tradeoffs. Retrieved from (Original work published January 1987)
Working Papers