| Ability Bias | The fact that earnings differentials across workers do not correctly estimate the returns to schooling if there are unobserved ability differences in the population.
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| Compensating Wage Differential | The extra amount an employer must pay to "reimburse" a worker for an undesirable job characteristic that does not exist in alternative jobs.
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| Hedonic Wage Function | The observed relationship between the wage that workers get paid and job characteristics.
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| Isoprofit Curve | A curve portraying the various wage and job dis-amenity (e.g., risk) combinations that yield a specific level of profit.
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| Reservation Price | The wage premium that will persuade a worker to accept a job with an unpleasant characteristic, such as the risk of injury.
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| Value of Statistical Life | The estimated 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. Estimates base on current economic models suggest the value of a life is on the order of $6 million in 1998 dollars.
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