Choosing a job, and why pay differs Cambridge IGCSE Economics revision
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In plain words
People do not pick a job for the pay alone. Hours, holidays, how safe the job is and whether they enjoy it all count. Economists call these non-wage factors.
Pay itself differs hugely between jobs, and the reasons come down to demand and supply, bargaining power, discrimination and government policy.
5 things to know
- Wage factors: the wage or salary, overtime pay, bonuses and commission.
- Non-wage factors: job satisfaction, hours and holidays, job security, promotion prospects, pension, working conditions, fringe benefits such as a company car, and the distance from home.
- Skilled workers earn more than unskilled workers: they are in shorter supply, and their higher productivity raises the demand for them.
- Wages differ between sectors (primary, secondary, tertiary) and between the private and public sectors, and they are affected by trade union strength and by minimum wage laws.
- Discrimination, for example against women, means that some workers are paid less, or kept out of better jobs, for reasons that have nothing to do with their work.
Tips and tricks
- When a question asks why one job pays more than another, start with demand and supply: is the worker hard to replace, and is the work valuable to the employer?
- Wages are paid by the hour or week, and salaries by the year. Fringe benefits are extras on top of pay.
It lands in your notebook with its questions as flashcards.
Choosing a job, and why pay differs: 5 questions and answers
These are the quiz’s questions. Do the quiz first, then come back here for the ones that got you.
Which is a non-wage factor in choosing a job?
The other three are payments.
Which is the most likely reason that airline pilots are paid more than shop assistants?
A small supply with a high demand gives a high wage.
A firm pays women less than men for doing the same job equally well. This is
The difference in pay has nothing to do with the work done.
Which is a fringe benefit?
A fringe benefit is a non-money extra given on top of pay.
Workers in a dangerous job, such as deep-sea diving, are often paid more because
Poor conditions reduce the supply of labour, so the wage has to be higher.
Quiz
5 questions
Tap an answer and you’ll see straight away whether it’s right, and why.
Worksheet
3 questions, 8 marks. Write your answers on paper, then check them.
Choosing a job, and why pay differs
Cambridge IGCSE Economics 0455 · 8 marks · papermunch.org
Name ______________________________ Date ______________
State two non-wage factors that may affect a person's choice of occupation.[2]
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Any two of: job satisfaction, working hours, length of holidays, job security, promotion prospects, pension, working conditions, fringe benefits, distance from home.
Explain why a person might choose a job as a teacher over a better-paid job in a bank.[3]
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Non-wage factors may matter more to them: teaching may give greater job satisfaction, longer holidays and more job security, which make up for the lower pay.
Explain two reasons why skilled workers are paid more than unskilled workers.[3]
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Their supply is lower, because fewer people have the training and qualifications. Demand for them is higher, because they are more productive and so add more to firms' revenue.
Answers: Choosing a job, and why pay differs
- 1. Any two of: job satisfaction, working hours, length of holidays, job security, promotion prospects, pension, working conditions, fringe benefits, distance from home.
- 2. Non-wage factors may matter more to them: teaching may give greater job satisfaction, longer holidays and more job security, which make up for the lower pay.
- 3. Their supply is lower, because fewer people have the training and qualifications. Demand for them is higher, because they are more productive and so add more to firms' revenue.