Globalization, Labour Market Segmentation, Unemployment and Wage Inequality: A Theoretical Analysis

Rakhi Banerjee () and Ranjanendra Narayan Nag ()
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Rakhi Banerjee: Gurudas College, Kolkata, Postal: Garpar Road,Kolkata-700009, West Bengal, India
Ranjanendra Narayan Nag: St. Xavier’s College, Postal: Ranjanendra Narayan Nag St. Xavier’s College, (Autonomous), P-36, CIT Scheme, VI M.S, Kolkata-700054, India

Journal of Economic Integration, 2011, vol. 26, 578-599

Abstract: In this paper we build up a three-sector general equilibrium framework to examine impact of agricultural trade liberalization, tariff rate restructuring and inflow of Foreign Direct Investment on unemployment and wage inequality in an emerging market economy. The paper shows that agricultural trade liberalization and tariff rate restructuring reduces the skilled-unskilled wage gap whereas increase in inflow of foreign capital may lead to worsening of income distribution. Multiple cross effects, factor specificity and factor intensity ranking play important roles in determining changes in output composition, factor rewards and unemployment in the wake of economic reforms.

Keywords: Economic Reforms; Efficiency Wage and Unemployment (search for similar items in EconPapers)
JEL-codes: F16 F21 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0550

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