Wages, earnings, total compensation, and income

There are a few basic:

· wage = payment per unit of time

· earnings = wage x hours (labor payment over an interval of time, typically a week, month, quarter, or year)

· total compensation = earnings + fringe benefits

· fringe benefits = payments-in-kind + deferred compensation
(where: payments-in-kind include any payments in the form of goods and services such as the use of a company provided car, or employer-provided meals, uniforms, health insurance, or similar benefits; and deferred compensation involves items such as pension plans and other programs that provide payments at some point in the future.)

· income = total compensation + unearned income
(in practice, when data on income is reported, income is generally measured as: income = earnings + unearned income since researchers generally do not have accurate measures of the value of fringe benefits)

Topic 3, 4. Labor Supply (1^st and 2^nd parts)

This topic examines the determinants of labor supply. The framework for this discussion relies on the basic neoclassical model in which individuals are assumed to face a trade-off between labor and leisure time. In this model, it is assumed that there are only two possible uses of time: labor and leisure. Each individual is assumed to select the mix of time and purchased inputs that maximizes his or her level of satisfaction (utility).