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Can international factor mobility lessen wage inequality in a dual economy?

Author

Listed:
  • Hamid Beladi

    (University of Texas at San Antonio)

  • Sarbajit Chaudhuri

    (University of Calcutta, India)

  • Shigemi Yabuuchi

    (Nagoya City University, Japan)

Abstract

This paper analyzes the consequences of international factor movements on the skilled-unskilled wage inequality in a dual economy setup that includes unemployment and three intersectorally mobile factors of production: unskilled labor, skilled labor and capital. The theoretical literature on the issue so far has adopted the full-employment framework and hence ignored the problem of unemployment. The analysis has found that the results crucially hinge on the difference in intersectoral factor intensity condition between skilled labor and capital. A comparative analysis among different policies designed at narrowing the wage inequality in a developing economy has also been made.

Suggested Citation

  • Hamid Beladi & Sarbajit Chaudhuri & Shigemi Yabuuchi, 2006. "Can international factor mobility lessen wage inequality in a dual economy?," Working Papers 0022, College of Business, University of Texas at San Antonio.
    • Handle: RePEc:tsa:wpaper:0057eco
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    References listed on IDEAS

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    1. Chaudhuri, Sarbajit, 2007. "Foreign capital, welfare and urban unemployment in the presence of agricultural dualism," Japan and the World Economy, Elsevier, vol. 19(2), pages 149-165, March.
    2. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," The World Bank Economic Review, World Bank, vol. 11(1), pages 33-57, January.
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    5. 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.
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    8. Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2007. "Economic liberalization and wage inequality in the presence of labour market imperfection," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 592-603.
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    Cited by:

    1. Chaudhuri, Sarbajit, 2008. "Fair Wage Hypothesis, Foreign Capital Inflow and Skilled-unskilled Wage Inequality in the Presence of Agricultural Dualism," MPRA Paper 9394, University Library of Munich, Germany.
    2. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2008. "Fair Wage Hypothesis, International Factor Mobility and Skilled-Unskilled Wage Inequality in a Developing Economy," MPRA Paper 9303, University Library of Munich, Germany.
    3. Ujjaini Mukhopadhyay, 2017. "Foreign Capital Inflow and Skill Formation: Effects on Skilled-unskilled Wage Inequality," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(4), pages 119-136, December.

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    More about this item

    Keywords

    Skilled-unskilled wage inequality; Unemployment; International factor movement;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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