International factor mobility, monopolistic competition, and wage inequality

Jiancai Pi; Yu Zhou; Jun Yin

doi:10.1016/j.econmod.2013.04.013

International factor mobility, monopolistic competition, and wage inequality

Jiancai Pi^*, Yu Zhou, Jun Yin

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

13 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 language	English
Pages (from-to)	326-332
Number of pages	7
Journal	Economic Modelling
Volume	33
DOIs	https://doi.org/10.1016/j.econmod.2013.04.013
Publication status	Published - 2013 Jul 1
Externally published	Yes

Keywords

FDI
Monopolistic competition
Skilled immigration
Unskilled immigration
Wage inequality

ASJC Scopus subject areas

Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.econmod.2013.04.013

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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.",

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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

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DO - 10.1016/j.econmod.2013.04.013

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VL - 33

SP - 326

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JO - Economic Modelling

JF - Economic Modelling

ER -

International factor mobility, monopolistic competition, and wage inequality

Abstract

Keywords

ASJC Scopus subject areas

UN SDGs

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