Horizontal Mergers and Wage Inequality

Jiancai Pi and Pengqing Zhang

Journal of Institutional and Theoretical Economics (JITE), 2018, vol. 174, issue 3, 495-513

Abstract: This paper incorporates horizontal mergers into the general-equilibrium framework embedded with game theory and separately analyzes how horizontal mergers in the skilled sector and the unskilled sector influence the skilled unskilled wage inequality. In an economy with full employment, a horizontal merger in the skilled sector will certainly reduce the wage gap. In an economy with unemployment, a horizontal merger in the skilled sector will conditionally expand the wage inequality. Whether in an economy with full employment or in an economy with unemployment, a horizontal merger in the unskilled sector will conditionally widen the wage gap.

Keywords: horizontal mergers; wage inequality (search for similar items in EconPapers)
JEL-codes: G34 J31 O12 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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DOI: 10.1628/093245617X14996661407785

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