COMPENSATING
WAGE
DIFFERENTIALS
1
Hwei-Lin Chuang, Ph.D.
2014/05/28
COMPENSATING WAGE DIFFERENTIALS
 The
model of competitive labor markets implies
that as long as workers or firms can freely enter
and exit the marketplace, there will be a single
wage in the economy if all jobs are alike and all
workers are alike.
2
重大職業災害
 定義：

1.發生死亡災害者。

2.發生災害之罹災人數在3人以上者。(包括受
傷者)

3.其他經中央主管機關指定公告之災害。(氨
、氯、氟化氫、光氣、硫化氫、二氧化硫等
化學物質之洩漏發生1人以上罹災勞工需住院
治療者。)
3
100年重大職業災害行業別
排名
行業別
人數
案件數占比%
1
營造業
128
45.5
2
製造業
97
36.2
3
運輸及倉儲業
10
3.6
4
其他服務業
7
2.9
5
批發及零售業
6
2.2
6
用水供應及汙染整治業
5
1.8
7
公共行政及國防；強制性社會安全
5
1.1
8
資訊及通訊傳播業
3
1.1
9
農林漁牧業
3
1.1
10
礦業及土石採取業
2
0.7
資料來源：行政院勞工委員會
4
101年重大職業災害行業別
排名
行業別
人數
案件數占比%
1
營造業
150
45.9
2
製造業
109
33.5
3
運輸及倉儲業
12
3.6
4
公共行政及國防；強制性社會安全
10
3.0
5
用水供應及汙染整治業
8
2.4
6
電力及燃料供應業
7
2.1
7
支援服務業
6
1.8
8
其他服務業
5
1.5
9
批發及零售業
5
1.5
10
農林漁牧業
5
1.5
資料來源：行政院勞工委員會
5
100年重大職業災害行業別分析

總計重大職災件數：279件

行業別案件數占比%(死亡人數)。

製表日期：中華民國101年3月2日

調查執行： 行政院勞工委員會
6
101年重大職業災害行業別分析

總計重大職災件數：331件

行業別案件數占比%(死亡人數)。

製表日期：中華民國102年8月8日

調查執行： 行政院勞工委員會
7
台灣十大危險工作排名大調查
 向「錢」看讓相當高比例上班族願意考慮從
事高危險工作的重要因素，但是工作危險卻
不一定代表相對得到更多的保障，某些高危
險性的工作職務會被保險公司列入「拒保」
戶。
 調查對象﹕ 台灣上班族
 調查時間： 2004年10月28日至2004年11月12日
 有效樣本﹕ 1,300份
 調查執行： 1111人力銀行
8
台灣十大危險工作排名
排名
危險工作
1
電力高壓工程施工人員
2
化學原料業（硫酸、硝酸、鹽酸）製造工作
3
大樓洗窗清潔工
4
採砂石業爆破工人
5
消防人員
6
油罐車／瓦斯載運工
7
警察
8
特技演員
9
醫療廢棄物處理人員
10
礦工
9
美國十大危險工作排名
資料來源:《CNN金錢網站》根據勞工部統計資料所做出的分析
排名
危險工作
1
漁夫(年死亡率: 200人/10萬人，平均年薪: 23,600美元)
2
伐木工人(年死亡率： 61.8人/10萬人，平均年薪: 34,440美元)
3
飛行員(年死亡率： 57.1人/10萬人，平均年薪： 106,240美元)
4
農夫與牧場工人(年死亡率： 35.8人/10萬人，平均年薪： 32,350美元)
5
屋頂工人(年死亡率： 34.7人/10萬人，平均年薪： 33,970美元)
6
鷹架工人(年死亡率： 30.3人/10萬人，平均年薪： 44,500美元)
7
垃圾清潔工人(年死亡率： 25.2人/10萬人，平均年薪： 32,070美元)
8
工廠技師(年死亡率： 18.5人/10萬人，平均年薪： 39,600美元)
9
卡車司機(年死亡率： 18.3人/10萬人，平均年薪： 37,730美元)
10
建築工人(年死亡率： 18.3人/10萬人，平均年薪： 29,150美元)
10
願意從事危險性工作原因

高達52.77%受訪上班族認為，當經濟壓力大時會從
事高危險性工作，顯見「高風險、高報酬」是上班族
願意「用生命搏金錢」的主因。

有42.38%的上班族「明知山有虎，偏向虎山行」是
因為薪水較高。

有39.92%的上班族選擇原因是認為可以「短期賺大
錢」。

也有超過三成受訪上班族在找不到工作時，會以選擇
高危險性工作來「度小月」 。

有24.23%受訪上班族在可以「增加人生歷鍊」的情
況下，會選擇從事高危險性工作。
11
高危險 低保障

在十大危險工作排名中，高壓電外線架設及修復人員
、特技演員、礦工等工作都屬於保險公司的拒絕往來
戶。

1111人力銀行調查發現，超過5成受訪上班族並不知
道某些高危險性的工作職務會被保險公司列入「拒保
」；危險工作被「拒保」 ，有 81%上班族認為「不
合理」 。

根據1111人力銀行分析﹕因特殊職務類別造成被保險
人的死亡或受傷機率高於整體平均值，保險公司的理
賠金額自然也居高不下，保險業者也會針對各類職務
屬性訂出調高保費，甚至「拒保」的規定 。

解決方案﹕透過工會團體，以集合的力量向保險公司
洽談有關保費的問題。
資料來源﹕http://project.1111.com.tw/zone/pr/headline.asp?autono=772
12
INTRODUCTION
 The
labor market is not characterized by a single wage:
workers differ and jobs differ.
 Adam
Smith proposed the idea that job characteristics
influence labor market equilibrium.
 Compensating
wage differentials arise to compensate
workers for nonwage characteristics of the job.
 Workers
have different preferences and firms offer
different working conditions.
13
 All
jobs are not the same. Adam Smith in 1776
argued that compensating wage differentials arise to
compensate workers for the nonwage characteristics
of jobs. It is not the wage that is equated across jobs
in a competitive market, but the “whole of the
advantages and disadvantages” of the job.
 Workers
differ in their preferences for job
characteristics and firms differ in the working
conditions that they offer. The theory of
compensating wage differentials tells a story of how
workers and firms “match and mate” in the labor
market.
14
各行業受雇員工每人每月平均薪資
行業別
98年
99年
100年
101年
102年
年增率(％)
總計
42,275
44,536
45,749
45,888
45,965
0.17
工業部門
礦業及土石採取業
40,032
42,869
43,946
44,280
44,342
0.14
49,674
52,863
54,385
53,129
55,275
4.04
製造業
39,152
42,420
43,533
43,994
44,133
0.32
電力及燃氣供應業
95,996
96,143
94,955
92,457
88,481
-4.30
用水供應及污染整治業
44,234
45,404
46,212
44,031
44,503
1.07
營造業
40,930
41,674
42,800
42,728
42,550
-0.42
服務業部門
批發及零售業
44,114
45,930
47,269
47,233
47,311
0.17
40,154
41,970
42,847
42,180
42,620
1.04
運輸及倉儲業
48,068
49,161
50,441
50,463
50,004
-0.91
住宿及餐飲業
27,171
27,829
29,761
30,156
30,552
1.31
資訊及通訊傳播業
62,013
64,425
66,588
67,309
65,927
-2.05
金融及保險業
67,513
73,663
75,988
76,932
76,911
-0.03
不動產業
38,720
41,154
42,313
39,957
40,804
2.12
專業、科學及技術服務業
49,969
52,942
55,182
56,198
55,241
-1.70
支援服務業
31,596
32,351
33,065
33,736
33,981
0.73
醫療保健服務業
22,195
22,457
22,414
22,769
22,922
藝術、娛樂及休閒服務業
57,844
57,887
59,887
60,263
59,910
0.67
15
-0.59
其他服務業
31,257
32,841
33,438
35,531
36,065
1.50
資料來源:行政院主計處受雇員工薪資調查與生產力統計-年報(102年)
1. WORKERS’ AND FIRMS’ CHOICE WITH RISKY JOBS
E.g. Employer X: NT.$100 per hour, clean, safe work conditions
Employer Y: NT.$100 per hour, dirty, noisy factory
→ Most workers would undoubtedly choose employer X.
If employer Y decides not to alter working conditions, it must
pay wage above NT.$100 to be competitive in the labor market.
→ The extra wage it must pay to attract workers is called a
compensating wage differential because the higher wage is
paid to compensate workers for the undesirable working
conditions.
After the wage rise of firm Y, if both firms could obtain the
quantity and quality of workers they wanted, the wage
16
differential would be an equilibrium differential, in the sense
that there be no forces causing the differential to change.
* THE COMPENSATING WAGE
DIFFERENTIAL SERVES TWO PURPOSES:
1.
It serves a social need by giving people an
incentive to voluntarily do dirty, dangerous, or
unpleasant work or a financial penalty on
employers offering unfavorable working
conditions.
2.
At an individual level, it serves as a reward to
workers who accept unpleasant jobs by paying
them more than comparable workers in more
pleasant jobs. Those who opt for more
pleasant conditions have to buy them by
accepting lower pay.
17
→ Compensating wage differentials provide the key
to the valuation of the nonpecuniary aspects of
employment.
Note:
The predicted outcome of the compensating wage
differential theory of job choice is not that employees
working under “bad” conditions receive more than
those working in “good” conditions. The prediction is
that, holding worker characteristics constant,
employees in bad jobs receive higher wages than
those working under more pleasant conditions.
18
* THE COMPENSATING WAGE DIFFERENTIAL
THEORY IS BASED ON THREE ASSUMPTIONS:
1.
Utility Maximization
Workers seek to maximize their utility, not their
income. Compensating wage differentials will only
arise if some people do not choose the highestpaying job offered, preferring instead a lowerpaying but more pleasant job.
→ Wages do not equalize in this case. The net
advantage – the overall utility from the pay and the
psychic aspects of the job – tend to equalize for the
marginal workers.
19
Worker Information
Workers are aware of the job characteristics of
potential importance to them.
→ Company offering a “bad” job with no compensating
wage differential would have trouble recruiting or
retaining workers, trouble that would eventually force
it to raise its wage.
2.
Note: Our predictions about compensating wage
differentials hold only for job characteristics that
workers know about.
3.
Workers Mobility
Workers have a range of job offers from which to
choose. It is the act of choosing safe jobs over
dangerous ones that forces employers offering
dangerous work to raise wages.
20
2. THE HEDONIC WAGE FUNCTION
A wage theory based on the assumption of
philosophical hedonism that workers strive to
maximize utility.
To simplify our discussion, we shall analyze just
one dimension –risk of injury on the job – and
assume that the compensating wage differentials for
every other dimension have already been
established.
→ To obtain a complete understanding of the job
selection process and the outcomes of that process,
it is necessary to consider both the employer and
employee sides of the market.
21
(1) EMPLOYEE CONSIDERATIONS
Some combinations of wage rates and risk levels that
would yield the same level of utility can be represented by
indifference curve map.
W
U3
U2
U1
U2 slopes upward because
risk of injury is a “bad” job
characteristics. i.e., if risk
increases, wage must rise if
utility is to be held constant.
22
Risk
INDIFFERENCE CURVES FOR THREE
TYPES OF WORKERS
Wage
UA
UB
UC
Probability of
Injury
Different workers
have different
preferences for risk.
Worker A is very
risk-averse. Worker
C does not mind risk
very much at all.
Worker B is between
the two.
23
(2) EMPLOYER CONSIDERATIONS
Assumptions:
It is presumably costly to reduce the risk of injury
facing employees.
a.
b.
c.
Perfect competition → Firms operate at zero profits.
All other job characteristics are presumably given
or already determined.
→ If a firm undertakes a program to reduce the risk of
injury, it must reduce wages to remain competitive.
24
Forces on the employer side of the market tent to
cause low risk to be associated with low wages and
high risk to be associated with high wages, holding
other things constant.
→The employer trade-offs between wages and levels
of injury risk can be graphed through the use of
isoprofit curves , which show the various
combinations of risk and wage level that yield a
given level of profits.
25
ISOPROFIT CURVES
Wage
P
p0
Q
p1
R
r*
Probability of
Injury
An isoprofit curve gives all
the risk-wage combinations
that yield the same profits.
Because it is costly to produce
safety, a firm offering risk
level ρ* can make the
workplace safer only if it
reduces wages (while keeping
profits constant), so that the
isoprofit curve is upward
sloping. Note: higher isoprofit
curves yield lower profits.
26
W
The concavity of isoprofit
curves is a representation of
our assumption that there are
diminishing marginal returns
to safety expenditures.
M
N
→ The cost of reducing risk
levels is reflected in the slope
of the isoprofit curve.
Risk
27
Y’
W
X’
Employers differ in
the ease (cost) with
which they can
eliminate hazards.
→ Firm X can reduce
risk more cheaply than
firm Y.
X
Y
Risk
28
(3) THE MATCHING OF EMPLOYER AND
EMPLOYEES
Graphing worker indifference curves and employer
isoprofit curves together can show which workers choose
which offers.
B2
Y’
W
B1
WBY
A’s choice: (WAX, RAX)
→ value safety higher
X’
If A took B’s offer
WAX
→ A1 < A2
A2
B’s choice: (WBY, RBY)
Y
X
A1
RAX
29
RBY
Risk
 Since
X can produce safety more cheaply than Y, X
will be a low-risk producer who attracts employees,
like A, who value safety highly. Y attracts people like
B, who have a relatively strong preference for money
wages and a relatively weak preference for safety.
Note:
The only offers of jobs to workers with a chance of
being accepted lie along XR’Y’.
→
The curve XR’Y’ can be called an “offer curve”,
because only along XR’Y’ will offers employers can
afford to make be potentially acceptable to
employees.
30
W
Offer Curve
Risk
The more types of firms there
are in a market, the smoother
this offer curve will be. It will
always slope upward because
of our assumptions that risk is
costly to reduce and that
employees must be paid
higher wages to keep their
utility constant if risk is
increased.
31
HEDONIC WAGE THEORY
 Workers
maximize utility by choosing wage-risk
combinations that offer them the greatest amount of
utility.
 Isoprofit
curves are upward sloping because
production of safety is costly.
 Isoprofit
curves are concave because production of
safety is subject to the law of diminishing returns.
 Hedonic
wage functions reflect the relationship
between wages and job characteristics.
32
THE HEDONIC WAGE FUNCTION
Wage
UC
UB
UA
PA
PB
PC
Hedonic
Wage
Function
pZ
pY
pX
Probability of
Injury
Different firms have different
isoprofit curves and different
workers have different
indifference curves. The labor
market marries workers who
dislike risk (such as worker A)
with firms that find it easy to
provide a safe environment
(like firm X); and workers who
do not mind risk very much
(worker C) with firms that find
it difficult to provide a safe
environment (firm Z). The
observed relationship between
wages and job characteristics is
called a hedonic wage function.33
* MAJOR INSIGHTS:
1.
Wages rise with risk, other things equal.
→ There will be compensating wage differentials for
job characteristics that are viewed as undesirable by
workers.
2.
Workers with strong preferences for safety will tend
to take jobs in firms where safety can be generated
most cheaply.
→ Firms and workers offer and accept jobs in a fashion
that makes the most of their strengths and
preferences.
34
3. POLICY APPLICATION: HOW MUCH IS A LIFE
WORTH?
 Studies
report a positive relationship between wages
and work hazards.
 The
statistical value of life is the amount that workers
are jointly willing to pay to reduce the likelihood that
one of them will suffer a fatal injury in a given year
on the job.
 The
empirical evidence is ambiguous on the estimates
of the value of a life.
35
1.
Empirical Evidences
• Many studies estimate the hedonic function relating
wages and the probability of injury on the job. This
literature typically estimates regressions of the form:
wi = γρi + other variables
Where wi gives the wage of worker i and ρi. gives the
probability of injury on the worker’s job. The
coefficient γ gives the wage change associated with a
one-unit increase in the probability of injury.
•
Many empirical studies report a positive relationship
between wages and hazardous or unsafe work
conditions, regardless of how the hazard or the unsafe36
nature of the work environment is defined.
2. Calculating the Value of Life
The correlations of the wages and the probability of
injury on the job allow us to calculate the “value of
life.”
Example:
Firm
Probability of Fatal Injury
Annual Earnings
X
ρx
wx
Y
ρx + .001
wx+ $5,000
37
 The
data suggests that each of the workers in firm Y is
willing to give up $5,000 per year to reduce the
probability of fatal injury in their job by 0.001 units.
Put differently, the 1,000 workers employed in firm Y
are willing to give up $5 million (or $5,000x 1,000
workers) to save the life of the one worker who will
almost surely die in any given year. The workers in
firm Y, therefore, value a life at $5 million.

This calculation instead gives the amount that
workers are jointly willing to pay to reduce the
likelihood that one of them will suffer a fatal injury in
any given year. It is the statistical value of a life.
38
車禍死亡民事賠償案例

上訴人為安康汽車貨運股份有限公司（下稱安康公司）僱用之司機，
於民國九十三年十二月一日駕駛該公司之油罐車，行經台北縣樹林市
○○路三七九巷與該路交岔路口時，疏未注意，闖越紅燈左轉，適被
害人陳先生騎乘重型機車直行至該路口，亦未減速慢行，見狀突然煞
車，致重心不穩人車倒地滑行，頭部被油罐車之左後輪擦撞死亡。司
機就系爭車禍既有過失，即應與安康公司，對被上訴人連帶負損害賠
償責任(被上訴人為陳先生之妻、女、父、母)。然陳先生騎乘機車未減
速慢行，亦應負十分之三之過失責任，並依過失相抵之規定，減輕上
訴人之賠償額十分之三。故被上訴人等四人實際得請求之數額依序為
陳先生之妻一百五十六萬七千九百六十九元（包括：扶養費、慰撫金
及其為陳先生支出之醫療費、殯葬費）、陳先生之女九十七萬七千七
百五十二元（包括：扶養費、慰撫金），陳先生之父四十九萬元（慰
撫金）、陳先生之母四十九萬元（慰撫金）。再扣除陳先生之妻、女
已各受償系爭事故強制汽車責任保險之保險金七十萬元後，被上訴人
等四人可得請求上訴人連帶給付之金額各為八十六萬七千九百六十九
元、二十七萬七千七百五十二元、四十九萬元、四十九萬元。
39
林克穎民事案判賠
（中央社記者黃貞貞倫敦23日專電）
英國高等法院今天一審宣判，在台灣酒駕撞死送報生潛逃的英商林克穎須賠償受害人家屬新台幣908萬元
。該判決將成為未來台英司法合作援引案例，保障台灣民眾權益，意義重大。
中華民國駐英代表處表示，樂見英國法院承認台灣法院對本案的民事判決，除可強化台英司法合作關係，
並為雙方司法互助建立良好範例，本案民事判決結果充分顯示中華民國政府對保護國人海外權益不遺餘力，並
獲重大具體成果。
英國高院下午進行審理，被羈押在愛丁堡的林克穎未出席，由辯護律師代表出庭，他以林克穎的引渡庭審
理仍未宣判，台灣與英國沒有正式外交關係為由，主張法官不宜就林克穎的民事賠償案作出判決，但論點未被
法官接受。
法官指出，林克穎案在台北法院審理時，林克穎根據台灣的司法程序聘請辯護律師，已承認台灣的司法管
轄權，同時針對今天審理的民事賠償案，林克穎並沒有提出任何的書面辯詞。
法官最後判決，英國高等法院承認台灣法院的民事判決，並立即生效，遭林克穎酒駕撞死的送報生黃俊德
的家屬可以向林克穎索償新台幣908萬元，如果林克穎拖欠不償還，以年利率8%累計賠償金額。
中華民國駐美代表沈呂巡先前擔任駐英代表期間，與代表處同仁殫精竭慮，從代表處舊卷宗中查得英國相
關司法當局數年前向台灣司法當局請求承認英國民事判決時表示，英國法院同意如果未來遇到台灣法院民事判
決希望在英國適用時可逐案考慮的文件，這份文件有效幫助代表台灣的委任律師在法庭上的攻防論據，贏得勝
訴。
為協助黃俊德家屬向林克穎索取賠償，法務部協調被害人保護協會募款出資，並請黃家授權駐英國代表處
出面協調，在英國提起民事訴訟。
今年2月13日，駐英代表處代表被害者黃俊德的父親黃國安，向英國高等法院針對林克穎案提出在英國法
律下的民事求償，並由羈押林克穎的蘇格蘭地方法院2月21日完成送達程序，追討賠償。
由於英國是歐洲聯盟會員國並簽署盧加諾公約（Lugano Convention），判決結果將自動適用於歐洲聯盟
其他27個會員國，及冰島、瑞士、挪威等歐洲國家。
日後即使林克穎服完刑期，仍需接受本案民事判決，支付被害者家屬上述賠償款項。
資深法界人士表示，因為26日為英國國定假日，今天民事判決的「支付命令」最快要等27日才能轉送給林
40
克穎，林克穎在接到判決文後14天內可提出上訴，不過除非林克穎能提出新的辯詞或法律論證，高院才會同意
他的上訴申請。
林克穎的引渡庭一審，愛丁堡地方法院將於6月11日宣判。