Nicole, a woman, is more educated and better trained than Tom, a male. Despite these differences in education and training, Tom still earns more because he is a coal miner, whereas Nicole is a secretary. Which model best explains the fact that Tom earns more than Nicole?

Question

Quizplus · Accepted Answer

The model of compensating differentials explains that people are willing to work in jobs with higher risks or unpleasant conditions only if they are compensated with higher pay. In this scenario, Tom is a coal miner, a job that is more risky and unpleasant than being a secretary, and therefore he receives compensation in the form of higher wages. This model takes into account both the education and training differences, as well as the job characteristics.

Nicole, a Woman, Is More Educated and Better Trained Than