Infrastructure Development Versus Direct Cash Transfer: A General Equilibrium Comparison

Sugata Marjit, Biswajit Mandal and Tonmoy Chatterjee

Review of Economics, 2017, vol. 68, issue 1, 63-74

Abstract: This paper attempts to provide an explanation to the debate whether infrastructure development is more effective than direct cash transfer to reduce wage disparity between skilled and unskilled workers. We use a simple general equilibrium structure to argue that in presence of symmetric productivity effects direct cash transfer meets the target when such transfer is financed by tax revenue collected from skilled wage bill. Nevertheless, in case of asymmetric productivity effects the arguments boil down to how different sectors absorb infrastructural facility to improve their productivity.

Keywords: infrastructure; redistribution; personal income tax; general equilibrium (search for similar items in EconPapers)
JEL-codes: D5 F1 H23 H24 H54 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/roe-2017-0006 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

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:lus:reveco:v:68:y:2017:i:1:p:63-74:n:3

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/roe/html

DOI: 10.1515/roe-2017-0006

Access Statistics for this article

Review of Economics is currently edited by Michael Berlemann

More articles in Review of Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().