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Social conflict and wage inequality

Jiancai Pi () and Pengqing Zhang ()
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Jiancai Pi: Nanjing University
Pengqing Zhang: Nanjing University

Journal of Economics, 2017, vol. 121, issue 1, 29-49

Abstract: Abstract This paper studies the relationship between social conflict and skilled–unskilled wage inequality through the three-sector general equilibrium approach. In the basic model without the urban unskilled minimum wage, we find that when the government enhances the degree of controlling social conflict, the skilled–unskilled wage inequality will be narrowed down (resp. widened) if the urban skilled sector is more capital intensive (resp. labor intensive) than the urban unskilled sector. The extended models address the issue under different economic structures or different types of social conflict. In the extended model with the urban unskilled minimum wage, we find that the skilled–unskilled inequality will be widened when the degree of controlling social conflict is increased. In other extended models, we find that the above obtained results are still robust.

Keywords: Social conflict; Skilled–unskilled wage inequality; General equilibrium approach (search for similar items in EconPapers)
JEL-codes: D58 D74 J31 K42 (search for similar items in EconPapers)
Date: 2017
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