Downsizing, wage inequality and welfare in a developing economy

Hamid Beladi and Chi-Chur Chao

Research in Economics, 2010, vol. 64, issue 4, 224-228

Abstract: This paper focuses on the cost cutting effects of firm downsizing in a developing economy. Using a dualistic production structure to depict a developing economy, the impacts of downsizing on wage inequality and social welfare are examined. Downsizing is revealed to not only narrow the wage gap between skilled and unskilled labor but also to raise the level of manufactured output and reduce the unemployment ratio in the urban sector. These effects improve the social welfare of the economy.

Keywords: Downsizing; Wage; inequality; Unemployment (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:64:y:2010:i:4:p:224-228

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