PPT Slide
In the labor market, each job can be described as consisting of a set of characteristics (e.g., the level of education required, the amount of risk associated with working on the job, the level of job stress, and so on) and an associated wage offer. As noted earlier, wage differentials may compensate for differences in nonwage job characteristics.
Let’s examine how firms and workers may jointly establish a market value for differences in the risk of injury faced on alternative jobs.