Consider two workers who are identical in every respect (including wages)except that one works in an industry whose workers are subject to a higher risk of long and frequent spells of uncompensated unemployment. Compared to the worker facing the lower risk of unemployment, the discounted expected present value of current and future earnings of the worker facing the higher risk of unemployment would be

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The worker facing the higher risk of unemployment will have a lower discounted expected present value of current and future earnings because of the uncertainty and variability of their future income. This is due to the potential for long and frequent spells of uncompensated unemployment, leading to a lower overall income and career earnings.

Consider Two Workers Who Are Identical in Every Respect (Including