Foreign capital, public infrastructure, and wage inequality in developing countries

Jiancai Pi, Yu Zhou

Research output: Contribution to journalArticle

28 Citations (Scopus)

Abstract

We establish four-sector general equilibrium models to investigate how an inflow of foreign capital influences the skilled-unskilled wage inequality in the presence of the endogenous public infrastructure provision. In the situation of the pure public infrastructure provision, the change of the skilled-unskilled wage inequality is determined by the comparison of the capital distributive shares in urban sectors. In the case of the semi-public infrastructure provision, the change of the skilled-unskilled wage gap is determined by the factor substitution elasticities in urban sectors. A potential extension is also given and it confirms the robustness of the obtained results.

Original languageEnglish
Pages (from-to)195-207
Number of pages13
JournalInternational Review of Economics and Finance
Volume29
DOIs
Publication statusPublished - 2014 Jan 1
Externally publishedYes

Fingerprint

Developing countries
Public infrastructure
Foreign capital
Wage inequality
Elasticity
Wage gap
Robustness
General equilibrium model
Factor substitution

Keywords

  • Foreign capital
  • Pure public infrastructure
  • Semi-public infrastructure
  • Wage inequality

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Cite this

Foreign capital, public infrastructure, and wage inequality in developing countries. / Pi, Jiancai; Zhou, Yu.

In: International Review of Economics and Finance, Vol. 29, 01.01.2014, p. 195-207.

Research output: Contribution to journalArticle

@article{317f0da2b8b64f46a2578d433503223c,
title = "Foreign capital, public infrastructure, and wage inequality in developing countries",
abstract = "We establish four-sector general equilibrium models to investigate how an inflow of foreign capital influences the skilled-unskilled wage inequality in the presence of the endogenous public infrastructure provision. In the situation of the pure public infrastructure provision, the change of the skilled-unskilled wage inequality is determined by the comparison of the capital distributive shares in urban sectors. In the case of the semi-public infrastructure provision, the change of the skilled-unskilled wage gap is determined by the factor substitution elasticities in urban sectors. A potential extension is also given and it confirms the robustness of the obtained results.",
keywords = "Foreign capital, Pure public infrastructure, Semi-public infrastructure, Wage inequality",
author = "Jiancai Pi and Yu Zhou",
year = "2014",
month = "1",
day = "1",
doi = "10.1016/j.iref.2013.05.012",
language = "English",
volume = "29",
pages = "195--207",
journal = "International Review of Economics and Finance",
issn = "1059-0560",
publisher = "Elsevier Inc.",

}

TY - JOUR

T1 - Foreign capital, public infrastructure, and wage inequality in developing countries

AU - Pi, Jiancai

AU - Zhou, Yu

PY - 2014/1/1

Y1 - 2014/1/1

N2 - We establish four-sector general equilibrium models to investigate how an inflow of foreign capital influences the skilled-unskilled wage inequality in the presence of the endogenous public infrastructure provision. In the situation of the pure public infrastructure provision, the change of the skilled-unskilled wage inequality is determined by the comparison of the capital distributive shares in urban sectors. In the case of the semi-public infrastructure provision, the change of the skilled-unskilled wage gap is determined by the factor substitution elasticities in urban sectors. A potential extension is also given and it confirms the robustness of the obtained results.

AB - We establish four-sector general equilibrium models to investigate how an inflow of foreign capital influences the skilled-unskilled wage inequality in the presence of the endogenous public infrastructure provision. In the situation of the pure public infrastructure provision, the change of the skilled-unskilled wage inequality is determined by the comparison of the capital distributive shares in urban sectors. In the case of the semi-public infrastructure provision, the change of the skilled-unskilled wage gap is determined by the factor substitution elasticities in urban sectors. A potential extension is also given and it confirms the robustness of the obtained results.

KW - Foreign capital

KW - Pure public infrastructure

KW - Semi-public infrastructure

KW - Wage inequality

UR - http://www.scopus.com/inward/record.url?scp=84888290480&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84888290480&partnerID=8YFLogxK

U2 - 10.1016/j.iref.2013.05.012

DO - 10.1016/j.iref.2013.05.012

M3 - Article

VL - 29

SP - 195

EP - 207

JO - International Review of Economics and Finance

JF - International Review of Economics and Finance

SN - 1059-0560

ER -