Wage differentials can be partially explained by which factor(s)?
I. differences in talent
II. different amounts of human capital
III. compensating differentials
A)I only
B)I and II only
C)III only
D)I, II, and III

Question

Quizplus · Accepted Answer

Wage differentials can be explained by differences in talent, different amounts of human capital, and compensating differentials. Talent affects productivity and thus wages; human capital, such as education and experience, directly impacts earnings; and compensating differentials refer to wage differences required to attract employees to jobs with varying characteristics (e.g., risk, desirability).

Wage Differentials Can Be Partially Explained by Which Factor(s)