Globalization, International Factor Mobility, and Wage Inequality

Shigemi Yabuuchi ()
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Shigemi Yabuuchi: Aichi University, Postal: Department of Economics, Aichi University, Hiraike, Nakamura-ku, Nagoya, Aichi 467-8501, Japan

Journal of Economic Integration, 2015, vol. 30, issue 3, 577-590

Abstract: The international movement of economic factors such as capital and skilled labor has complex effects on the economies involved, especially when multiple factors move at the same time. One important effect is the potential change in wage inequality between skilled and unskilled labor—particularly, in developing countries that have agreed to trade with developed countries. This study considers a small open economy with two goods and three factors to determine whether wage inequality increases or decreases due to increased movement of these factors. The key findings are that wage inequality can unambiguously increase and decrease, under certain circumstances regarding the capital intensity of the sector(s), the initial amount of foreign factors, and the shares of factors in national income.

Keywords: International Factor Mobility; Wage Inequality; Unemployment (search for similar items in EconPapers)
JEL-codes: F15 F16 F22 R23 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0669

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