Question

What are compensating differentials and how might they explain a portion of the gender wage gap?

Answer 1

A compensating wage differential is nothing but the additional.money that has to be paid to a worker in order to please him or even motivate him to accept a job that he is actually unwilling to perform when compared to the other jobs that he could actually involve in.

It can actually be mentioned that the difference is the characteristics of the job can actually result in the trend of the earnings between the two different genders. Consider I'm a country, people are unwilling to work jobs which involve high physical strenuous work. As a result of this, one can actually attribute that male workers are more likely to perform it easier if it involves high physical strenuous work when compared to that of female workers due to the secondary sexual characteristics differences in both the genders. This is the reason why compensating differential could me more as in case of male than that of female where this is the reason why compensating differential can get to explain a portion of gender wage gap. For certain other jobs, there can be chance that female workers might have more compensating differentials.