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Heterogeneous Preferences, Compensating Wage Differentials, and Comparable Worth

Mark R. Killingsworth^1,2

¹ National Bureau of Economic Research · ² Rutgers Sexual and Reproductive Health and Rights

This paper sets up a general equilibrium model of a world of heterogeneous jobs and heterogeneous tastes, and uses the model to (i) analyze the effects of employer discrimination and (ii) predict the likely consequences of requiring "equal pay for jobs of comparable worth." It shows that employment of both women and men is likely to fall as a result of comparable worth. It also shows that when individuals' tastes are heterogeneous, neither comparable worth nor the simple model of compensating differentials on which it is based provides useful insights into wage determination. In particular, when tastes are heterogeneous, there is no reason to expect equal pay for jobs of "comparable worth" even in the absence of employer discrimination.

DOI

10.2307/1884278

Volume

102 (4)

Pages

727

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