International factor mobility, production cost components, and wage inequality

Jiancai Pi, Yu Zhou

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

The present paper establishes a two-sector monopolistic competition model to investigate how international factor mobility influences the skilled-unskilled wage inequality when the monopolistically competitive sector producing final goods is characterized by various types of production cost functions. We discuss three types of production cost functions of the monopolistically competitive sector. Different types of production cost functions have different production factor components of variable and fixed costs. We find that differences in production cost components of the monopolistically competitive sector matter for the impacts of international factor mobility on the skilled-unskilled wage inequality.

Original languageEnglish
Pages (from-to)503-522
Number of pages20
JournalB.E. Journal of Economic Analysis and Policy
Volume15
Issue number2
DOIs
Publication statusPublished - 2015 Jan 1
Externally publishedYes

Keywords

  • International factor mobility
  • Monopolistic competition
  • Production cost components
  • Skilledunskilled wage inequality

ASJC Scopus subject areas

  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)

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