choose the right answer More wage dispersion An economics consulting firm is int

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choose the right answer

More wage dispersion An economics consulting firm is interviewing consultants. The firm hires Sanjay, a recent Ph.D. graduate in economics, and pays him an annual wage of $75,000. It also hires Arun, a recent master's degree graduate in economics, and pays him an annual wage of $60,000. Sanjay and Arun attended the same university, so they went through the same graduate program. They are both Indian. Which of the following accounts for the wage disparity? Compensating wage differentials Discrimination Market power Difference in human capital

Explanation / Answer

Difference in human capital

Because Sanjay has a PhD in economics , so he has invested more in human capital as acompared to Arun who has a master's degree in economics.

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