Raa, T. ten Pan, H. (Tilburg University, Center for Economic Research)
Abstract
Our objective is to assess personal income under perfect competition, when factors are rewarded according to their productivities, and to contrast the ensuing distribution with the status quo. Competition will yield winners and losers, both in terms of factor claims and in terms of regions or provinces. Income differences will press people to migrate. To analyze this, we divide China into 30 input-output sectors and 27 provinces; we maximize domestic final demand, while preserving its proportions in each province, subject to material balances and factor constraints. The shadow prices to the constraints represent competitive commodity prices and factor rewards. Unskilled labor would stand to lose and, therefore, inequality would mount. The pressure on interprovincial migration would be enormous with 10 to 20% of the people on the road. The flipside is the great potential for improvement of the average standard of living.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number
52.