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Nonlinear Effects of the Transport Costs on the Wage Inequality

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  • Yuichiro Matsumoto

    () (Osaka University)

Abstract

This paper examines how transport costs affect wage inequality. Goods produced by the unskilled must pay higher transport costs because they have low market values. Reduction in transportation cost changes the relative wage. At first, only the skilled gains from the transportation improvement. Then the unskilled also gains from international trade. Therefore, transportation development causes Kuznets curve.

Suggested Citation

  • Yuichiro Matsumoto, 2018. "Nonlinear Effects of the Transport Costs on the Wage Inequality," Discussion Papers in Economics and Business 18-07, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  • Handle: RePEc:osk:wpaper:1807
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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1807.pdf
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    References listed on IDEAS

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    1. Alfonso Irarrazabal & Andreas Moxnes & Luca David Opromolla, 2015. "The Tip of the Iceberg: A Quantitative Framework for Estimating Trade Costs," The Review of Economics and Statistics, MIT Press, vol. 97(4), pages 777-792, October.
    2. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
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    Cited by:

    1. Yuichiro Matsumoto, 2018. "Endogenous Sunk Cost, Scale Economies, and Market Concentration," Discussion Papers in Economics and Business 18-20, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).

    More about this item

    Keywords

    Alchian-Allen Hypothesis; Kuznets Curve; Trade Liberalization; Transportation Infrastructure; Wage Inequality;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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