Holly and Emily both have a BS in nursing from the same college. Both have been nurses for eight years. Holly works from 11 P.M. until 7 A.M., and Emily works from 7 A.M. until 3 P.M. Holly's salary is $1,000 per month higher than Emily's salary. This is an example of a wage disparity due to a compensating differential.

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Quizplus · Accepted Answer

A compensating differential is a higher wage paid to compensate for less desirable job conditions, such as working night shifts, which is likely why Holly earns more.

Holly and Emily Both Have a BS in Nursing from the Same