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Corruption and wage inequality?

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  • Mandal, Biswajit
  • Marjit, Sugata

Abstract

Does corruption aggravate wage-inequality? We try to answer this question in terms of a general equilibrium model where both skilled and unskilled workers participate in corruption. Corruption in our model diverts resources from the productive sectors. Factor intensities within the productive sectors and between production and corruption activities determine the wage impact of corruption. Lower degree of corruption may increase wage-inequality although the size of the corruption sector definitely contracts.

Suggested Citation

  • Mandal, Biswajit & Marjit, Sugata, 2010. "Corruption and wage inequality?," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 166-172, January.
    • Handle: RePEc:eee:reveco:v:19:y:2010:i:1:p:166-172
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