Equalizing Wage Differentials

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Equalizing Wage Differentials
James Antwi, Premium Member
A compensating differential, which is also called a compensating wage differential or an equalizing difference, is defined as the additional amount of income that a given worker must be offered in order to motivate her to accept a given undesirable job, relative to other jobs that worker could perform.
How can we use the theory of 'wage equalising differentials' to attract skilled workers to remote and rural areas in low income countries?
Is the mode of application the same in both developed world and developing economies?

Compensating Differential Incentive Pay
Mohun Aujayeb, Member
If a worker is asked to perform a work/job/task that is normally not performed by others in that group/grade, it makes sense to additionally compensate that worker. Such workers who are exposed to insalubrious and risky conditions which may affect health are generally given 10-20 % as incentive to attract and retain them on that particular job.
Workers exposed to unfavourable conditions like foul odor, radiation risks, etc. are also given incentive pay in the public sector in Mauritius.



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