Who governs the compensating differential?

Question

Quizplus · Accepted Answer

The compensating differential is governed by the marginal worker, as it is the additional amount of income that a worker requires to be indifferent between two jobs with different levels of risk, convenience, or other non-monetary characteristics. This concept is based on the idea that the worker at the margin—the one who is indifferent between taking and not taking a job because of its non-monetary characteristics—sets the necessary compensation level for those characteristics.

Who Governs the Compensating Differential