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Geographical differential

definition and explanation

Synonyms:

geographic variation, regional variation, local variation

What is

Geographical differential

Geographical differential is the difference in wages paid to workers in different geographical locations.

Geographical differential

explained

Geographical differential is the difference in pay given to employees who work in different geographical areas. The rationale behind this is that employees who work in areas with a higher cost of living should be paid more than those who work in areas with a lower cost of living. This is because employees in high cost of living areas will have a higher cost of living expenses, and thus need to be paid more in order to maintain their standard of living. There are a number of factors that can affect the cost of living in an area, such as the cost of housing, transportation, and food.

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