Product variety, finite changes and wage inequality
AbstractThis paper presents a model with product variety to examine the effects of emigration and capital mobility between the North and the South on production reorganization and two-sided wage inequality. We obtain conditions under which the production patterns in both North and South undergo ‘finite changes’. Overall, the production and trade patterns may be such that the South produces and exports a homogeneous good while the North, a commodity with varieties — the result driven not by technological changes, but by factor mobility. The results further suggest that the wage inequality rises in both countries in conformity with available empirical evidence.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 35 (2013)
Issue (Month): C ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411
Product variety; Factor mobility; Finite changes; Wage inequality; Trade patterns;
Find related papers by JEL classification:
- F2 - International Economics - - International Factor Movements and International Business
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2007.
"Economic liberalization and wage inequality in the presence of labour market imperfection,"
International Review of Economics & Finance,
Elsevier, vol. 16(4), pages 592-603.
- Sarbajit Chaudhuri & Shigemi Yabuuchi, 2005. "Economic Liberalization And Wage Inequality In The Presence Of Labour Market Imperfection," International Trade 0510008, EconWPA.
- Paul M Romer, 1999.
"Endogenous Technological Change,"
Levine's Working Paper Archive
2135, David K. Levine.
- Paulo Bastos & Odd Rune Straume, 2010.
"Globalization, product differentiation and wage inequality,"
NIPE Working Papers
8/2010, NIPE - Universidade do Minho.
- Paulo Bastos & Odd Rune Straume, 2012. "Globalization, product differentiation, and wage inequality," Canadian Journal of Economics, Canadian Economics Association, vol. 45(3), pages 857-878, August.
- Paulo Bastos & Odd Rune Straume, . "Globalization, product differentiation and wage inequality," Discussion Papers 10/03, University of Nottingham, GEP.
- Paulo Bastos & Odd Rune Straume, 2010. "Globalization, Product Differentiation and Wage Inequality," Research Department Publications 4679, Inter-American Development Bank, Research Department.
- Paulo Bastos & Odd Rune Straume, 2010. "Globalization, Product Differentiation and Wage Inequality," IDB Publications 6867, Inter-American Development Bank.
- Kar, Saibal & Beladi, Hamid, 2004. "Skill formation and international migration: welfare perspective of developing countries," Japan and the World Economy, Elsevier, vol. 16(1), pages 35-54, January.
- Aghion, P. & Howitt, P., 1989.
"A Model Of Growth Through Creative Destruction,"
UWO Department of Economics Working Papers
8904, University of Western Ontario, Department of Economics.
- Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
- Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
- Marjit, Sugata & Kar, Saibal, 2005. "Emigration and wage inequality," Economics Letters, Elsevier, vol. 88(1), pages 141-145, July.
- Marjit, Sugata & Kar, Saibal & Hazari, Bharat R., 2013. "Emigration, unemployment and welfare – The role of non-traded sector," The North American Journal of Economics and Finance, Elsevier, vol. 24(C), pages 298-305.
- Satya P. Das, 2003. "Trade and Relative Wage in a Global Economy," Review of International Economics, Wiley Blackwell, vol. 11(2), pages 397-411, 05.
- Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-73, October.
- Segerstrom, Paul S, 1991.
"Innovation, Imitation, and Economic Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 99(4), pages 807-27, August.
- Gustafsson, Peter & Segerstrom, Paul, 2010. "North-South trade with increasing product variety," Journal of Development Economics, Elsevier, vol. 92(2), pages 97-106, July.
- Robert C. Feenstra & Gordon H. Hanson, 1995.
"Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras,"
NBER Working Papers
5122, National Bureau of Economic Research, Inc.
- Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
- Findlay, Ronald & Jones, Ronald, 2000. "Factor bias and technical progress," Economics Letters, Elsevier, vol. 68(3), pages 303-308, September.
- Anwar, Sajid, 2008. "Factor mobility, wage inequality and welfare," International Review of Economics & Finance, Elsevier, vol. 17(4), pages 495-506, October.
- Ronald W. Jones & Sugata Marjit, 2003. "Economic Development, Trade and Wages," German Economic Review, Verein für Socialpolitik, vol. 4(1), pages 1-17, February.
- Acemoglu, Daron, 2002.
"Directed Technical Change,"
Review of Economic Studies,
Wiley Blackwell, vol. 69(4), pages 781-809, October.
- Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
- Anwar, Sajid, 2006. "Factor mobility and wage inequality in the presence of specialisation-based external economies," Economics Letters, Elsevier, vol. 93(1), pages 88-93, October.
- Sugata Marjit & Saibal Kar, 2011.
"Emigration, Finite Changes and Wage Inequality,"
Discussion Papers Series
423, School of Economics, University of Queensland, Australia.
- Marjit, S., 1991.
"A competitive general equilibrium model of technology transfer, innovation and obsolescence,"
RCER Working Papers
309, University of Rochester - Center for Economic Research (RCER).
- Sugata Marjit, 1994. "A competitive general equilibrium model of technology transfer, innovation, and obsolescence," Journal of Economics, Springer, vol. 59(2), pages 133-148, June.
- Reza Oladi & Hamid Beladi, 2007. "International Migration and Real Wages," Economics Bulletin, AccessEcon, vol. 6(30), pages 1-8.
- Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-66, April.
- Leiponen, Aija, 2005. "Skills and innovation," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 303-323, June.
- Helpman, Elhanan, 2011. "Understanding Global Trade," Economics Books, Harvard University Press, number 9780674060784.
- Das, Satya P., 2002. "Foreign direct investment and the relative wage in a developing economy," Journal of Development Economics, Elsevier, vol. 67(1), pages 55-77, February.
- Sugata Marjit & Hamid Beladi & Avik Chakrabarti, 2004. "Trade and Wage Inequality in Developing Countries," Economic Inquiry, Western Economic Association International, vol. 42(2), pages 295-303, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.