Labor Economics 5th Edition by George Borjas

تمرين 20

Suppose a drop in the compensating wage differential between risky jobs and safe jobs has been observed. Two explanations have been put forward:
• Engineering advances have made it less costly to create a safe working environment.
• The phenomenal success of a new action serial "Die On The Job!" has imbued millions of viewers with a romantic perception of work-related risks.
Using supply and demand diagrams, show how each of the two developments can explain the drop in the compensating wage differential. Can information on the number of workers employed in the risky occupation help determine which explanation is more plausible