Public infrastructure provision and skilled–unskilled wage inequality in developing countries

Jiancai Pi and Yu Zhou

Labour Economics, 2012, vol. 19, issue 6, 881-887

Abstract: In this paper, we develop several static three-sector general equilibrium models with diverse labor market structures to investigate the effects of government provision of public infrastructure on the skilled–unskilled wage inequality in developing countries. The basic full employment model shows that the production sectors' relative dependence on the public infrastructure provision plays a crucial role in determining the skilled–unskilled wage inequality. Different relative dependences on public infrastructure may even result in opposite changes in the skilled–unskilled wage inequality. The above results are robust even when we extend the basic full employment model to three fundamentally different cases.

Keywords: Public infrastructure; Skilled labor; Unskilled labor; Wage inequality; Labor market structure (search for similar items in EconPapers)
JEL-codes: H54 J31 O12 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:19:y:2012:i:6:p:881-887

DOI: 10.1016/j.labeco.2012.08.007

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