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Wealth Effects And Earnings Premiums For Job Hazards, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

DAM Smith (1937) observed that "the whole of the advantages and disadvantages of the different employments of labor and stock must, in the same neighborhood, be either perfectly equal or continually tending to equality." If a job poses health and safety risks that are especially great, a worker will require higher levels of compensation or greater non-pecuniary benefits in order for him to accept the risky job. Despite the fact that the theory of compensating differentials is almost two centuries old, it has been only recently that this theory has been subjected to successful empirical tests. The purposes of this …