EconPapers    
Economics at your fingertips  
 

Taxation of labour, product varieties and skilled–unskilled wage inequality: Short run versus long run

Sizhong Sun and Sajid Anwar ()

International Review of Economics & Finance, 2015, vol. 38, issue C, 250-257

Abstract: In a three-sector general equilibrium model, we examine the impact of a partial tax on labour on skilled–unskilled wage inequality. We find that a tax on labour in industrial sector increases skilled–unskilled wage inequality in the short run and can have the opposite effect in the long run. A tax on labour in the services sector reduces skilled–unskilled wage inequality in both the short run and long run. Furthermore, the introduction of a tax on labour in agricultural sector has no effect on the skilled wage but reduces the unskilled wage. Accordingly, such a tax increases skilled–unskilled wage inequality in both the short run and long run.

Keywords: Skilled–unskilled wage inequality; Partial tax on labour; Product varieties; Monopolistic competition (search for similar items in EconPapers)
JEL-codes: J31 H24 D00 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056015000532
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:38:y:2015:i:c:p:250-257

DOI: 10.1016/j.iref.2015.03.001

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-07-07
Handle: RePEc:eee:reveco:v:38:y:2015:i:c:p:250-257