Wage differentials that serve to compensate for the relative attractiveness, or nonmonetary differences, among jobs are called compensating differentials.

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Compensating differentials are wage differentials that exist to compensate for non-monetary differences among jobs, such as working conditions or job hazards. These differentials are intended to make less attractive jobs more desirable to workers by offering higher wages or benefits.

Wage Differentials That Serve to Compensate for the Relative Attractiveness