If a person who works as a commercial fisherman gets paid more than a person with a similar background and skills who works in a safer job, then a. commercial fishermen must have greater human capital than others b. we have observed a compensating differential c. commercial fishermen must be more attractive than other workers d. we have evidence of discrimination against workers outside of commercial fishing

1. We start by understanding that a compensating differential is an extra payment given to workers when their jobs have non-monetary unattractive characteristics, such as risk or discomfort. 2. In this case, the commercial fisherman’s job is more dangerous compared to the safer job held by someone with similar skills and background. 3. Since the commercial fisherman is paid more despite having similar skills and background, the extra pay is likely to compensate for the higher risk associated with the job. 4. Thus, the phenomenon in which higher pay compensates for riskier working conditions is exactly what is referred to as a compensating differential. Therefore, the correct answer is \( (b) \) we have observed a compensating differential.