Non-homothetic preferences: Explaining unidirectional movements in wage differentials

• 成果类型: Article
• 署名作者: Santra, Sattwik
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2014.03.012
• 发表日期: 2014
• 页码: 87-97
• 关键词: trade; Non-homothetic preferences; Relative wage; Skilled to unskilled wage inequality

摘要

This paper explores the impact of trade on the relative returns to skill in the presence of non-homothetic preferences. In a general equilibrium model of trade in differentiated products, it is shown that, if consumers react to a rise in real income by increasing their demands of the relatively skill intensive commodity/ies, then real income gains associated with trade, increase the skilled-unskilled wage ratio. This result generalizes to trade driven by comparative advantages and to technological progress. (C) 2014 Elsevier B.V. All rights reserved.