Wage Inequality and Structure of Consumption Demand
We present a model in which there is a variety of consumption goods, of which high-income individuals purchase the expensive ones that low-income individuals cannot afford. Increases in the relative supply of skilled workers suggest relative increases in the number of high-income individuals in our model. Increases therefore in the relative supply of skilled workers induces changes in consumption demands, which indirectly affect both the labor demands of firms and the relative skilled wage. We show that a) if expensive goods purchased only by high-income individuals are more skilled labor intensive goods and b) if the substitution between skilled and unskilled labor is limited in the production of each good, then an exogenous increase in the relative supply of skilled workers raises the relative skilled wage.
If 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.
Volume (Year): 20 (2011)
Issue (Month): 1 (March)
|Contact details of provider:|| Postal: York Hall 327, 2275 Bayview Avenue, Toronto, Ontario M4N 3M6|
Web page: http://www.jid-online.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:jid:journl:y:2011:v:20:i:1:p:83-103. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Timm Boenke)
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.