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Compensating Wage Differentials and the Duration of Wage Loss

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  • Hamermesh, Daniel S
  • Wolfe, John R

Abstract

A formal model of occupational choice is developed that shows the extent to which the compensation for increased duration exceeds that for increased risk. Using the Panel Study of Income Dynamics linked to industry data on injuries and unemployment, the authors find nearly all the compensating wage differential for losses due to workplace injuries is for increases in the duration of loss and similarly for losses due to cyclical unemployment. The compensating differentials for risk of injury are larger for union than for nonunion workers, while those for cyclical unemployment are smaller for union workers. Copyright 1990 by University of Chicago Press.

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  • Hamermesh, Daniel S & Wolfe, John R, 1990. "Compensating Wage Differentials and the Duration of Wage Loss," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 175-197, January.
    • Handle: RePEc:ucp:jlabec:v:8:y:1990:i:1:p:s175-97
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    1. Craig A. Olson, 1981. "An Analysis of Wage Differentials Received by Workers on Dangerous Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 167-185.
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    6. Duncan, Greg J & Holmlund, Bertil, 1983. "Was Adam Smith Right after All? Another Test of the Theory of Compensating Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 366-379, October.
    7. Michael Hurd, 1980. "A Compensation Measure of the Cost of Unemployment to the Unemployed," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(2), pages 225-243.
    8. Arnould, Richard J & Nichols, Len M, 1983. "Wage-Risk Premiums and Workers' Compensation: A Refinement of Estimates of Compensating Wage Differential," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 332-340, April.
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