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Nonlinear Effects of the Transport Costs on the Wage Inequality

Yuichiro Matsumoto ()
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Yuichiro Matsumoto: Osaka University

No 18-07, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper examines how transport costs affect wage inequality. Goods produced by the unskilled must pay higher transport costs because they have low market values. Reduction in transportation cost changes the relative wage. At first, only the skilled gains from the transportation improvement. Then the unskilled also gains from international trade. Therefore, transportation development causes Kuznets curve.

Keywords: Alchian-Allen Hypothesis; Kuznets Curve; Trade Liberalization; Transportation Infrastructure; Wage Inequality (search for similar items in EconPapers)
JEL-codes: F16 J31 L91 O11 R1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int and nep-tre
Date: 2018-03
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