Capital Concentration and Wage Inequality

Jiancai Pi and Fan Yanwei ()
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Fan Yanwei: Department of Economics, Nanjing University, 22 Hankou Road, Nanjing 210093, Jiangsu, China

The B.E. Journal of Theoretical Economics, 2020, vol. 20, issue 1, 9

Abstract: This paper analyzes how capital concentration affects wage inequality through the channel of financial frictions. Higher capital concentration can be regarded as the Piketty effect. Under the framework of cost constrained financial frictions, we find that higher capital concentration will expand (resp. narrow down) wage inequality if the asset-liability ratio in the skilled sector is high (resp. low) enough relative to that in the unskilled sector.

Keywords: capital concentration; wage inequality; financial frictions (search for similar items in EconPapers)
JEL-codes: J31 O16 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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DOI: 10.1515/bejte-2019-0049

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