CONTACT-INTENSITY, DISRUPTIONS IN THE CULTURAL SECTOR AND WAGE INEQUALITY: A MODEL OF COVID-19 CRISIS AND ITS IMPACT

Sugata Marjit and Gouranga Das
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Sugata Marjit: School of Accounting and Finance. M715, 7/F, Li Ka Shing Tower, Hong Kong Polytechnic University Business School, Kowloon, Hong Kong2Indian Institute of Foreign Trade, Kolkata, India3Centre for Studies in Social Sciences, Kolkata, India

The Singapore Economic Review (SER), 2024, vol. 69, issue 05, 1717-1742

Abstract: COVID-19 has adverse impacts on contact-intensive sectors, viz., manufacturing, tourism, and the entertainment sector (ES). In a general equilibrium (GE) model with online, entertainment and informal sectors employing skill, unskilled, and capital, we show that COVID-19 could cause polarization pushing contact-intensive entertainment industry on the brink of collapse while the other two survive. Dual roles of factor intensity and contact intensity (CI) contribute to such finite changes, triggering inter-skill wage inequality. This is the first of its kind to offer a theoretical mechanism capturing the contractionary effects on contact-intensive sectors and wage inequality. These results match with the literature emphasizing the hardships faced by the cultural sector.

Keywords: Wage-gap; COVID-19; contact-intensive; cultural sector; general equilibrium; quasi-specific; social-distancing (search for similar items in EconPapers)
JEL-codes: D50 I18 J31 L80 N30 O10 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S0217590824420049

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