Risk Premium and Responsibility Cost: A Fair Wage Theory for Dual Labor Markets

This study develops a unified wage theory for dual labor markets by integrating responsibility cost and risk premium. It demonstrates that fair wages for non-regular workers require explicit inclusion of instability risks, analogous to financial market risk premiums. Industry-specific simulations and international comparisons show that even Nordic countries, despite strong unions, do not fully reflect risk premiums, leaving residual wage gaps. The proposed equilibrium condition—responsibility equals the sum of benefit gaps and risk premiums—provides a powerful rationale for wage parity. Denying this logic would imply rejecting the very foundation of risk compensation in financial markets. Policy implications include embedding risk-premium clauses in minimum wage legislation, mandating disclosure of benefit gaps, and enforcing fair wage formulas in public procurement.