(I) Differences in worker productivity are one major reason why individual earnings differ. (II) Even if all workers were identical, differences in the desirability of jobs would still cause earnings differentials.

Question

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Both statements are true and present different reasons why individual earnings may differ. Statement I suggests that disparities in worker productivity can explain why some workers may earn more than others. On the other hand, statement II suggests that even if all workers were equally productive, differences in the desirability of jobs (such as their level of risk, stress, or satisfaction) would still result in earnings differentials. Therefore, both factors can influence wage levels in the economy.

(I) Differences in Worker Productivity Are One Major Reason Why