economist peter kostiuk, in a 1990 article in the journal of political economy, wanted to see whether the theory of compensating differentials was true for u.s. workers. he had information on the wages, education backgrounds, and work experience of u.s. workers, and he knew whether they worked the day shift or the night shift. on average, those who worked the night shift actually earned about 4% less than workers on the day shift. is this probably because of compensating differentials, or is it probably because of human capital differences?
