Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5083022 | International Review of Economics & Finance | 2017 | 12 Pages |
Abstract
This paper, using a general equilibrium model of production and trade for a developing country with non-traded goods, dual unskilled labour markets and internationally fragmented skill-intensive production, illuminates how liberalised input trade affects the unskilled wages prevailing in the informal sectors and employment conditions in those sectors. Numerical analysis further highlights importance of the elasticities of factor substitution in production of different sectors to determine the movement in informal wage and therefore the movement in skilled-unskilled wage gap. These results are consistent with the empirical evidence on developing countries (like India) that suggests liberalisation-inequality relationship cannot be explained by focusing on tradable goods alone.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Soumyatanu Mukherjee,