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Inflow of labour, producer services and wage inequality

  • Zhang, Jingjing
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    This paper examines the issue of skilled–unskilled wage inequality in the shortrun when varieties of producer services are traded. It is shown that, irrespective of the relative size of income share of capital, inflow of neither skilled nor unskilled labour affects skilled–unskilled wage inequality. However, an increase in (i) the level of competition in the services sector and (ii) relative price of the varieties of producer services can affect the level of wage inequality.

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    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 117 (2012)
    Issue (Month): 3 ()
    Pages: 600-603

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    Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:600-603
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    1. Epifani, Paolo & Gancia, Gino, 2002. "The Skill Bias of World Trade," Seminar Papers 707, Stockholm University, Institute for International Economic Studies.
    2. Markusen, James R. & Strand, Bridget, 2007. "Trade in Business Services in General Equilibrium," CEPR Discussion Papers 6080, C.E.P.R. Discussion Papers.
    3. Kurokawa, Yoshinori, 2008. "Fixed Cost, Number of Firms, and Skill Premium: An Alternative Source for Rising Wage Inequality," MPRA Paper 14014, University Library of Munich, Germany.
    4. Marjit, Sugata & Kar, Saibal, 2005. "Emigration and wage inequality," Economics Letters, Elsevier, vol. 88(1), pages 141-145, July.
    5. Sébastien Breau & David L. Rigby, 2010. "International trade and wage inequality in Canada," Journal of Economic Geography, Oxford University Press, vol. 10(1), pages 55-86, January.
    6. Roy Chowdhury, Sahana, 2010. "Technology and outsourcing: An explanation to the rising wage gap," Economic Modelling, Elsevier, vol. 27(1), pages 380-387, January.
    7. Gupta, Manash Ranjan & Dutta, Priya Brata, 2010. "Skilled-unskilled wage inequality, nontraded good and endogenous supply of skilled labour: A theoretical analysis," Economic Modelling, Elsevier, vol. 27(5), pages 923-934, September.
    8. Afonso, Oscar & Leite, Rui, 2010. "Learning-by-doing, technology-adoption costs and wage inequality," Economic Modelling, Elsevier, vol. 27(5), pages 1069-1078, September.
    9. Hamid Beladi & Sarbajit Chaudhuri & Shigemi Yabuuchi, 2008. "Can International Factor Mobility Reduce Wage Inequality in a Dual Economy?," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 893-903, November.
    10. Chaudhuri, Sarbajit, 2006. "Wage Inequality in a Dual Economy and International Mobility of Factors: DO Factor Intensities always matter?," MPRA Paper 1356, University Library of Munich, Germany.
    11. Fang, Chen-ray & Huang, Li-hsuan & Wang, Ming-cheng, 2008. "Technology spillover and wage inequality," Economic Modelling, Elsevier, vol. 25(1), pages 137-147, January.
    12. Anwar, Sajid, 2009. "Wage inequality, welfare and downsizing," Economics Letters, Elsevier, vol. 103(2), pages 75-77, May.
    13. 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.
    14. Yabuuchi, Shigemi & Chaudhuri, Sarbajit, 2007. "International migration of labour and skilled-unskilled wage inequality in a developing economy," Economic Modelling, Elsevier, vol. 24(1), pages 128-137, January.
    15. 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, 08.
    16. Walde, Klaus & Wei[ss], Pia, 2007. "International competition, downsizing and wage inequality," Journal of International Economics, Elsevier, vol. 73(2), pages 396-406, November.
    17. Pacheco, Gail, 2009. "Revisiting the link between minimum wage and wage inequality: Empirical evidence from New Zealand," Economics Letters, Elsevier, vol. 105(3), pages 336-339, December.
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