The author investigates the wisdom of public policy widening the salary differential between researchers and professors. He evaluates the potential problems in adopting a self-selection wage policy, when workers' risk aversion and preferences or the accumulation of human capital are considered. (Author/CH)

Using an input-output framework, the author derives hypotheses on wage differentials based on the assumption that human capital (in this case, education) will explain workers' wage differentials. The hypothetical wage differentials are tested on data from the Italian economy. (RW)