Compensating wage differentials and AIDs risk

"We examine the effect of HIV/AIDS infection risks on the earnings of registered nurses (RNs) and other health care workers by combining data on metropolitan statistical area (MSA) AIDS prevalence rates with annual 1987-2001 Current Population Survey (CPS) and quadrennial 1988-2000 National Sample Survey of Registered Nurses (SRN) data. Holding constant wages of control groups that are likely not exposed to AIDS risks and group-specific MSA fixed effects, a 10 percent increase in the AIDS rate raises RN earnings by about 0.8 percent in post-1992 samples, when AIDS rates were falling but a more comprehensive categorization of AIDS was used by the CDC. AIDS wage differentials are much larger for RNs and non-nursing health practitioners than for other nursing and health care workers, suggesting that this differential represents compensation paid for job-related exposure to potentially HIV-infected blood"--National Bureau of Economic Research web site.