Which of the following is not an example of a compensating differential?
A)Chris is a consultant who is paid more than other workers with similar skills because he is required to travel 80% of the time.
B)Abby is a teacher who is paid less than other workers with similar skills because she does not have to work during the summer months.
C)Ben is a businessman who is paid more than other workers with similar skills because he graduated from a prestigious university with honors.
D)Daphne is a skyscraper window-washer who is paid more than other workers with similar skills because of the risk she faces in her daily job.

Question

Quizplus · Accepted Answer

Compensating differentials are wage differences that result from non-monetary factors such as job risk, job complexity, and job location. Option C, where Ben is paid higher due to his educational qualification, is not an example of a compensating differential. Instead, it is a wage premium for a human capital investment.

Which of the Following Is Not an Example of a Compensating