نابرابری های دستمزد نیروی کار ماهر و غیر ماهر و بیکاری: تجزیه و تحلیل تعادل عمومی

The paper develops a static three sector competitive general equilibrium model of a small open economy in which skilled labor is mobile between a traded good sector and the non-traded good sector and unskilled labor is specific to another traded good sector. Capital is perfectly mobile among all these three sectors. We introduce involuntary unemployment equilibrium in both the labor markets and explain unemployment using efficiency wage hypothesis. We examine the effects of change in different factor endowments and prices of traded goods on the unemployment rates and on the skilled–unskilled relative wage. Also, we introduce Gini-Coefficient of wage income distribution as a measure of wage income inequality; and show that a comparative static effect may force the skilled–unskilled relative wage and the Gini-Coefficient of wage income distribution to move in opposite directions in the presence of unemployment. Research highlights ► We develop a static three sector competitive general equilibrium model of a small open economy. ► Three inputs- Skilled labor, unskilled labor and Capital. ► We introduce involuntary unemployment equilibrium in both the labour markets. ► We explain unemployment using efficiency wage hypothesis. ► The skilled-unskilled relative wage and the Gini-Coefficient of wage income distribution move in opposite directions in the presence of unemployment.

Explanation of growing income inequality is one of the important recent research areas in Development Economics. The conventional belief is that globalization leads to an improvement in welfare both from the aggregative and distributive perspectives. However, with regard to its distributive effect, many empirical works point out that skilled–unskilled wage income inequality has grown up in various developed1 and developing2 countries. Different studies offer different explanations for this phenomenon; and trade liberalization and technological progress are the main two controversial reasons of this phenomenon.3 Many empirical studies also point out other causes like international outsourcing,4 increase in the price of skill intensive good,5 entry of unskilled labor surplus low income countries in the international market6 etc. According to the conventional theory, developed and less developed countries, who generally play opposite roles on international factor movements and face opposite type of changes in the relative price structure of traded goods due to trade liberalization, should face opposite movements in the degree of skilled–unskilled wage inequality. However, empirical data show that both these groups of countries have experienced an increase in the degree of wage inequality.7 There exists a theoretical literature dealing with the issue of this growing wage inequality and trade liberalization; and it is based on the framework of static competitive general equilibrium models8 with two different types of labor — skilled and unskilled. We can divide the existing theoretical literature into two groups. One group of models assumes full employment of both type of labor and this group includes works of Gupta and Dutta, 2010a, Gupta and Dutta, 2010b, Yabuuchi and Chadhuri, 2009, Yabuuchi and Chadhuri, 2007, Chaudhuri and Yabuuchi, 2007, Chaudhuri and Yabuuchi, 2008, Marjit and Acharyya, 2003, Marjit and Acharyya, 2006, Marjit and Kar, 2005, Marjit et al., 2004 and Kar and Beladi, 2004 etc. However, only Chaudhuri and Yabuuchi, 2008 and Marjit and Acharyya, 2003 introduce non-traded goods in their models; and assume it to be produced by unskilled labor. Hence, these models cannot analyze the role played by the mobility of skilled labor between the traded good sector and the non-traded good sector on the skilled–unskilled wage inequality. Another small group of models consider Harris and Todaro (1970) type unemployment of unskilled labor; and this group includes works of Marjit and Acharyya, 2003, Beladi et al., 2008 and Chaudhuri, 2008. However, these models assume full employment of skilled labor. Chaudhuri and Banerjee (2010) explain unemployment of skilled labor with the help of efficiency wage hypothesis9 and unemployment of unskilled labor using Harris and Todaro (1970) migration mechanism. However, they do not consider non-traded good. The ratio of the wage rate of the skilled worker to that of the unskilled worker is taken as the measure of wage inequality in all these models. However, none of them considers Gini-Coefficient as a measure of wage inequality. The present model is also a static competitive general equilibrium model of a small open economy with skilled labor and unskilled labor being two primary factors of production. However, it is an improvement over the existing literature because it, on one hand, considers mobility of skilled labor between a traded good sector and a non-traded good sector and, on the other hand, introduces efficiency wage hypothesis to explain unemployment in each of the two labor markets. According to the efficiency wage hypothesis, efficiency of a laborer varies positively with its wage rate and the unemployment rate in the labor market. The non-traded good is assumed to be a non-inferior final good whose demand varies positively with the disposable income of consumers; and thus increases in factor prices and/or factor endowments produce positive effects on the demand for the non-traded good and consequently on its equilibrium price. The skilled–unskilled wage ratio and unemployment rates in two labor markets are affected by this change in this equilibrium price. Gini-Coefficient of wage income distribution is also considered as a measure of wage income inequality as an alternative to the skilled–unskilled wage ratio. We derive some interesting results from this model. First, Gini-Coefficient of wage income distribution appears to be a monotonically increasing function of the skilled–unskilled relative wage in the absence of unemployment. However, this is not so in the presence of unemployment. Secondly, different comparative static effects may force the skilled–unskilled relative wage and the Gini-Coefficient of wage income distribution to move in opposite directions in the presence of unemployment. So our present work justifies why the skilled–unskilled relative wage may yield misleading results about the change in the degree of wage income inequality in the presence of unemployment even though all full employment models in the existing literature rightly assume this relative wage as the only measure of wage income inequality. This paper is organized as follows. Section 2 describes the model; and Section 3 analyzes effects of changes in factor endowments on unemployment rate, skilled–unskilled relative wage and Gini-Coefficient of wage-income distribution. In Section 4, we analyze similar effects of exogenous changes in prices of traded goods. Concluding remarks are made in Section 5.

The model developed in the present paper is a static three sector mobile capital competitive general equilibrium model of a small open economy in which unskilled labor is specific to a traded good sector but the skilled labor is mobile between another traded good sector and a non-traded good sector. Also we introduce involuntary unemployment equilibrium in both the labor markets and explain unemployment using efficiency wage hypothesis. Gini-Coefficient of wage income distribution is considered as the measure of inequality. None of the full employment models available in the literature use Gini-Coefficient as the measure of wage income inequality. Few models introduce unemployment but do not consider Gini-Coefficient.21 Our present work shows that a comparative static effect may force the skilled–unskilled relative wage and the Gini-Coefficient of wage income distribution to move in opposite (same) directions in the presence (absence) of unemployment; and this result justifies why the skilled–unskilled relative wage as a measure of wage income inequality should be replaced by the Gini-Coefficient of income distribution in the presence of unemployment. However, our model does not introduce many important aspects of reality. The problem of imperfection of markets is ignored here. Skilled labor and capital cannot accumulate over time in this static model. We ignore cross price effects on the demand function for the non-traded good; and do not analyze the role of sector specific capital and the role of backward institutions on unskilled labor using sectors. We also rule out the possibility of induced migration caused by interregional or rural–urban wage gap. The same efficiency function has been considered for skilled labor as well as for unskilled labor only from the view point of simplicity. Few authors22 think that nutritional efficiency functions are relevant for unskilled workers who often lie below the poverty line. According to the nutritional efficiency function, efficiency varies positively with level of consumption of food. If food is a normal good, then efficiency should vary positively with wage rate and inversely with the unemployment; and an inverse relationship between unemployment and efficiency must affect the results to some extent. Major results would also change marginally if we introduce Harris–Todaro type of unemployment in the unskilled labor market.23 We plan to remove these problems in future works. The following are the supplementary materials related to this article. Appendix A. Help with DOC files