More than 200 years ago, Adam Smith argued that individuals consider the "whole of the advantages and disadvantages- of different employments" and make decisions based on the alternative with the greatest "net advantage. If a jab has negative characteristics—that is, if the necessary training is very expensive (medical school), job security is tenuous (stockbrokers, CEOs), working conditions. are disagreeable (highway construction), or chances of success are low (professional sports) - then employers must offer higher wages to compensate for these negative features.
Such compensating differentials explain the presence of various pay rates in the market. Although the notion is appealing, it is hard to document, due to the difficulties in measuring and controlling all the factors that go into a net-advantage calculation.