The impacts of corruption on wage inequality and rural–urban migration in developing countries

Jiancai Pi and Yu Zhou ()

The Annals of Regional Science, 2015, vol. 54, issue 3, 753-768

Abstract: This paper establishes three-sector general equilibrium models and separately investigates how sector-biased corruption influences the wage rates of skilled and unskilled workers, the wage inequality, and the amount of unskilled rural–urban migrants in developing countries. Corrupt activities are introduced in our theoretical models as transaction costs. We find that the reductions in different sector-biased corrupt behaviors exert different impacts through various economic mechanisms. In addition, the change in urban unskilled unemployment due to the decrease in the degree of sector-biased corruption is also taken into account. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: D73; J31; R23 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s00168-015-0674-0

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