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Labor Inflow Induced Wage Inequality and Public Infrastructure

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  • Sajid Anwar

Abstract

By making use of a simple general equilibrium model of a small open economy, the author examines the link between labor mobility and the size of wage inequality in the presence of productive public infrastructure. The paper shows that the provision of public infrastructure plays an important part in determining the size of labor inflow induced wage inequality. Specifically, it shows that, irrespective of the relative factor intensities, a small inflow of either skilled or unskilled labor does not affect the size of wage inequality if private industries derive equal benefits from public infrastructure provision. A small inflow of skilled (unskilled) labor increases (decreases) wage inequality if skilled (unskilled) labor intensive industry derives more benefits from public infrastructure.

Suggested Citation

  • Sajid Anwar, 2008. "Labor Inflow Induced Wage Inequality and Public Infrastructure," Review of Development Economics, Wiley Blackwell, vol. 12(4), pages 792-802, November.
    • Handle: RePEc:bla:rdevec:v:12:y:2008:i:4:p:792-802
    DOI: 10.1111/j.1467-9361.2008.00453.x
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    References listed on IDEAS

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    1. Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers Archive 11375, Iowa State University, Department of Economics.
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    Cited by:

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    2. Zhang, Pengqing, 2019. "Automation, wage inequality and implications of a robot tax," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 500-509.
    3. Pi, Jiancai & Zhang, Pengqing, 2021. "Redistribution and wage inequality," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 510-523.
    4. Pi, Jiancai & Zhou, Yu, 2014. "Foreign capital, public infrastructure, and wage inequality in developing countries," International Review of Economics & Finance, Elsevier, vol. 29(C), pages 195-207.
    5. Sajid Anwar, 2010. "Wage Inequality, Increased Competition, and Trade Liberalization: Short Run vs Long Run," Review of International Economics, Wiley Blackwell, vol. 18(3), pages 574-581, August.
    6. Jiancai Pi & Xinyi Liu, 2023. "Urban bias and multinational firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(1), pages 101-114, February.
    7. Pi, Jiancai & Zhang, Pengqing, 2016. "Hukou system reforms and skilled-unskilled wage inequality in China," China Economic Review, Elsevier, vol. 41(C), pages 90-103.
    8. Pi, Jiancai & Zhang, Pengqing, 2018. "Structural change and wage inequality," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 699-707.
    9. Shichao Yuan & Xizhuo Wang, 2024. "Increase or Reduce: How Does Rural Infrastructure Investment Affect Villagers’ Income?," Agriculture, MDPI, vol. 14(12), pages 1-21, December.
    10. Sun, Sizhong & Anwar, Sajid, 2015. "Taxation of labour, product varieties and skilled–unskilled wage inequality: Short run versus long run," International Review of Economics & Finance, Elsevier, vol. 38(C), pages 250-257.
    11. Pi, Jiancai & Chen, Xuyang, 2016. "The impacts of capital market distortion on wage inequality, urban unemployment, and welfare in developing countries," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 103-115.
    12. Jiancai Pi & Yu Zhou, 2015. "The impacts of corruption on wage inequality and rural–urban migration in developing countries," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 753-768, May.
    13. Jiancai Pi & Kaiqi Zhang & Xiangyu Huang, 2023. "Financial globalization and wage inequality," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(2), pages 144-157, May.
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    15. Chi‐Chur Chao & Leonard F. S. Wang, 2022. "Corporate governance, firm dynamics, and wage inequality," Manchester School, University of Manchester, vol. 90(3), pages 341-353, June.

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