wage differential


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Wage Differential

The difference in wage or salary between two employees of different classes who perform the same work. Examples of classes include age, gender, race, religion or even union and non-union membership. Wage differentials may be legal in some circumstances, but are generally illegal when based on gender, ethnicity, sexual orientation and similar classes.

wage differential

see PAY DIFFERENTIAL.

wage differential

the payment of a different WAGE RATE to different groups of workers. Wage differentials arise from three main factors:
  1. differences in inter-occupational skills, training and responsibilities (surgeons are paid more than nurses, managers are paid more than labourers);
  2. differences in inter-industry growth rates and PRODUCTIVITY levels (high-growth, high-productivity industries pay more than declining or low-productivity industries);
  3. differences between regions in income per head and local employment levels (prosperous areas in general pay more than depressed areas).

Wage differentials that encourage greater labour MOBILITY between occupations and industries and promote high levels of productivity play an important part in bringing about a more effective use of labour resources. On the other hand, some wage differentials contribute to both economic and social distortions, in particular those that reflect racial or sexual discrimination and the exploitation of workers by powerful employers (‘sweat-shop‘labour). By the same token, ‘unjustified‘wage differentials arising out of the abuse of trade union monopoly power equally mitigate against the best use of labour resources.

References in periodicals archive ?
The biggest wage differential of P32.39 per day was noted in palay farms where the salaries of male and female laborers reached P309.83 and P277.44, respectively.
Furthermore, the four previously-defined terms of the BMZ and DGSX methodologies are grouped and specified as the wage offer gap or the unconditional wage differential. The wage offer gap is interpreted as the wage a worker randomly drawn from the population would receive if selected into the occupational category in question (Gyourko and Tracy, 1988).
Using household survey data throughout the 2002-2005 period, Razavi and Habibi (2014) use the Oaxaca decomposition method to investigate the significance of the wage differential between males and females in Iran.
(Baron and Cobb-Clark, 2010) A significant characteristic of the gender wage differential is its advancement throughout the life cycle as a role of labor market experience.
Moreover, the federal--private wage differential I estimate for ORG wages is not significantly different from the differential I estimate for wages based on annual earnings (see Table Al, columns (5) and (2)).
Hypothesis 2: The wage differential between men and women will be lower for nonprofit employees than for profit employees.
The empirical findings reported here are consistent with the proposed relationship between firm's job rotation and wage differentials. More precisely, a positive relationship between intra-industry wage differential and firm's job rotation is found.
Technically, such individuals contribute to the identification of the cross section but not the panel estimates of the marital wage differential. Thus, these individuals may explain the substantial differences often observed between panel and cross-section estimates of the white male marital wage differential.
Mr Ramsey said: "[This] represents the highest public-private wage differential of all the UK regions.
Wage differential due to employer size is one of the key areas of interest in labour market research because a strong positive relationship between employer size and wages has been observed in developed and developing countries.
(1988) On the Decomposition of Wage Differential. The Review of Economics and Statistics, 70, pp.