Congratulations! You Have Just Been Appointed Chair of the Pay

Congratulations! You have just been appointed chair of the pay equity commission, but this is not like the conventional commission which is concerned with the relative pay levels of women and visibility minorities. Your mandate is to analyze pay premia across occupations, industries, regions, as well as the public sector/private sector premium.
• How does one typically argue that a certain group of workers is receiving a wage premium? Wha serves as the frame of reference, or point of comparison, for such an evaluation? In other words, "overpaid" compared to what?
• Explain the theoretical causes of wage premia. In particular, identify each of the following economic factors, and explain how each could give rise to wage differentials. In each case, give a concrete illustration pertaining to a wage premium across one of the dimensions listed in the paragra above.
- non-competitive factors, such as efficiency wages
- compensating differentials
- immobility of labour across markets
- short-run transitory disequilibria across markets
• Without giving any technical details, what is the fundamental empirical challenge in asserting tha worker A receives a wage premium compared to worker B?