Public infrastructure provision and skilled-unskilled wage inequality in developing countries

Jiancai Pi*, Yu Zhou

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

45 Citations (Scopus)


In this paper, we develop several static three-sector general equilibrium models with diverse labor market structures to investigate the effects of government provision of public infrastructure on the skilled-unskilled wage inequality in developing countries. The basic full employment model shows that the production sectors' relative dependence on the public infrastructure provision plays a crucial role in determining the skilled-unskilled wage inequality. Different relative dependences on public infrastructure may even result in opposite changes in the skilled-unskilled wage inequality. The above results are robust even when we extend the basic full employment model to three fundamentally different cases.

Original languageEnglish
Pages (from-to)881-887
Number of pages7
JournalLabour Economics
Issue number6
Publication statusPublished - 2012 Dec 1
Externally publishedYes


  • Labor market structure
  • Public infrastructure
  • Skilled labor
  • Unskilled labor
  • Wage inequality

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management


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