My work is often in-between labour economics and organization sociology/psychology. The typical cross-over topic is job quality. In this respect, one hypothesis is 'compensating wage differentials': higher wages compensate not only for schooling and investment, but also for worse working conditions or a heavy workload.
Most often, however, we see that heavy, dangerous work is not that well paid at all. On the other hand, clerical work, which is safe and needs hardly more schooling, makes for more gains. This seems to run counter to the idea of compensating wage differentials.
However, we're mixing up effects. White collar workers are most often found in sectors where higher rents can be distributed. And if not, then companies have to compete for these employees with those sectors. What we will find is that within each occupation - at least in Belgium - and within companies, there actually is fine tuning of wages based on work demands. So yes, compensating wage differentials do exist, but they are not the dominant factor: schooling and market demand are more important. This is why wages correlate with better working conditions.
A model of job quality including wage would therefore stem from a wage equation including job quality.
Wage = Schooling + Ability + DemandShift (national income) - SupplyShift (average schooling) - Job Quality
