International factor mobility, monopolistic competition, and wage inequality

Jiancai Pi, Yu Zhou, Jun Yin

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

This paper introduces monopolistic competition into two-sector general equilibrium models to investigate the impacts of international factor mobility on the skilled-unskilled wage inequality. The basic model shows that the change of skilled-unskilled wage inequality is determined by the comparison of the capital-labor distributive shares between the two sectors. The extended model finds that when the output of the monopolistically competitive sector is non-tradable, the mechanism in the basic model fails to work. Thus, we should pay special attention to the role that the non-tradable feature of final-good production plays. In addition, the welfare effects of an FDI inflow are also examined by the basic and extended models.

Original languageEnglish
Pages (from-to)326-332
Number of pages7
JournalEconomic Modelling
Volume33
DOIs
Publication statusPublished - 2013 Jul 1
Externally publishedYes

Fingerprint

International factors
Factor mobility
Monopolistic competition
Wage inequality
Labor
Welfare effects
General equilibrium model

Keywords

  • FDI
  • Monopolistic competition
  • Skilled immigration
  • Unskilled immigration
  • Wage inequality

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

International factor mobility, monopolistic competition, and wage inequality. / Pi, Jiancai; Zhou, Yu; Yin, Jun.

In: Economic Modelling, Vol. 33, 01.07.2013, p. 326-332.

Research output: Contribution to journalArticle

@article{85c8b9eb29cc4f878f6ecc1c45daa667,
title = "International factor mobility, monopolistic competition, and wage inequality",
abstract = "This paper introduces monopolistic competition into two-sector general equilibrium models to investigate the impacts of international factor mobility on the skilled-unskilled wage inequality. The basic model shows that the change of skilled-unskilled wage inequality is determined by the comparison of the capital-labor distributive shares between the two sectors. The extended model finds that when the output of the monopolistically competitive sector is non-tradable, the mechanism in the basic model fails to work. Thus, we should pay special attention to the role that the non-tradable feature of final-good production plays. In addition, the welfare effects of an FDI inflow are also examined by the basic and extended models.",
keywords = "FDI, Monopolistic competition, Skilled immigration, Unskilled immigration, Wage inequality",
author = "Jiancai Pi and Yu Zhou and Jun Yin",
year = "2013",
month = "7",
day = "1",
doi = "10.1016/j.econmod.2013.04.013",
language = "English",
volume = "33",
pages = "326--332",
journal = "Economic Modelling",
issn = "0264-9993",
publisher = "Elsevier",

}

TY - JOUR

T1 - International factor mobility, monopolistic competition, and wage inequality

AU - Pi, Jiancai

AU - Zhou, Yu

AU - Yin, Jun

PY - 2013/7/1

Y1 - 2013/7/1

N2 - This paper introduces monopolistic competition into two-sector general equilibrium models to investigate the impacts of international factor mobility on the skilled-unskilled wage inequality. The basic model shows that the change of skilled-unskilled wage inequality is determined by the comparison of the capital-labor distributive shares between the two sectors. The extended model finds that when the output of the monopolistically competitive sector is non-tradable, the mechanism in the basic model fails to work. Thus, we should pay special attention to the role that the non-tradable feature of final-good production plays. In addition, the welfare effects of an FDI inflow are also examined by the basic and extended models.

AB - This paper introduces monopolistic competition into two-sector general equilibrium models to investigate the impacts of international factor mobility on the skilled-unskilled wage inequality. The basic model shows that the change of skilled-unskilled wage inequality is determined by the comparison of the capital-labor distributive shares between the two sectors. The extended model finds that when the output of the monopolistically competitive sector is non-tradable, the mechanism in the basic model fails to work. Thus, we should pay special attention to the role that the non-tradable feature of final-good production plays. In addition, the welfare effects of an FDI inflow are also examined by the basic and extended models.

KW - FDI

KW - Monopolistic competition

KW - Skilled immigration

KW - Unskilled immigration

KW - Wage inequality

UR - http://www.scopus.com/inward/record.url?scp=84877807659&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84877807659&partnerID=8YFLogxK

U2 - 10.1016/j.econmod.2013.04.013

DO - 10.1016/j.econmod.2013.04.013

M3 - Article

AN - SCOPUS:84877807659

VL - 33

SP - 326

EP - 332

JO - Economic Modelling

JF - Economic Modelling

SN - 0264-9993

ER -