Fixed cost, number of firms, and skill premium: An alternative source for rising wage inequality

AbstractThis paper argues that, even in the presence of decreasing average costs of production, monopolies can sometimes be avoided in the interest of market efficiency. It is shown that under certain conditions on the variable cost of production, there is an alternate, viable market structure that reduces the well-known deadweight loss of monopoly: an “upstream” market in which one or more firms own and share the fixed cost of creating and maintaining a distribution network, and a “downstream” market populated by a large number of firms that are charged a unit price for the network’s usage.

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Is Industry Size a Carrier for Wage Inequality? A Panel Study Addressing Independent Variables of Inherently Different Sizes across Units

Journal of Risk and Financial Management ◽

10.3390/jrfm14090436 ◽

2021 ◽

Vol 14 (9) ◽

pp. 436

Author(s):

Jarle Aarstad ◽

Olav Andreas Kvitastein

Keyword(s):

Wage Inequality ◽

Monopolistic Competition ◽

Panel Study ◽

Absolute Number ◽

Size Increase ◽

Panel Regression ◽

Independent Variables ◽

Small Industries ◽

Random Change ◽

Number Of Firms

We address how independent variables of inherently different sizes across units, e.g., small vs. large industries, in panel regression is an advantage interpretively. Analyzing a Norwegian industry panel, we find that wage inequality is a function of industry size, particularly size increase, in an absolute number of firms. A possible reason is that specialized skilled employees negotiate higher wages when there are many legal entities. The findings can also imply that wage inequality is more sensitive to random change, particularly an increase, in large rather than small industries. We conclude that particularly large industries are positive carriers of wage inequality and discuss potential underlying causal mechanisms such as monopolistic competition.

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The role of skills and tasks in changing employment trends and income inequality in Chile

10.35188/unu-wider/2021/986-0 ◽

2021 ◽

Author(s):

Gabriela Zapata-Román

Keyword(s):

Income Inequality ◽

Wage Inequality ◽

Returns To Education ◽

Decomposition Methods ◽

Skill Premium ◽

Cognitive Tasks ◽

Occupational Structure ◽

Job Polarization ◽

Employment Trends

Using decomposition methods, we analyse the role of the changing nature of work in explaining changes in employment, wage inequality, and job polarization in Chile from 1992 to 2017. Changes in occupational structure confirm a displacement of workers from low-skill occupations towards jobs demanding non-routine higher skills (professionals and technicians), and to jobs demanding routine manual and cognitive tasks (services and sales). Changes in occupational earnings have had an equalizing effect, with more substantial gains in favour of lower-skill occupations and also at the top of the skill premium. Inequality reductions since the 2000s are explained by a fall in earnings in the top percentiles of the distribution, which have been reallocated most noticeably around the median (2000–06) and the bottom 30 per cent (2006–17). Changes in the returns to education and the relocation of workers towards less-routine occupations have contributed to the inequality reduction.

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ENDOGENOUS POLITICAL INSTITUTIONS, WAGE INEQUALITY, AND ECONOMIC GROWTH

Macroeconomic Dynamics ◽

10.1017/s1365100515000449 ◽

2016 ◽

Vol 21 (1) ◽

pp. 183-213 ◽

Cited By ~ 2

Author(s):

Christos Pargianas

Keyword(s):

Labor Force ◽

Wage Inequality ◽

Political Institutions ◽

College Graduates ◽

Political Process ◽

Skill Premium ◽

The Political ◽

Skilled Workers ◽

Long Run ◽

Short Run

The paper suggests that the political changes brought about by the increase in the proportion of college graduates in the U.S. labor force in the 1970s may have contributed to the decline in the college premium during the 1970s and its increase during the 1980s and 1990s. The study argues that the proportion of skilled workers in the labor force affected their relative importance in the political process. Thus, the increase in the proportion of skilled workers during the 1970s reduced the skill premium in the short run, but induced a change in policies that favored skilled workers and increased the skill premium in the long run.

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Probabilistic Heterogeneous Patent Protection and Innovation Incentives

The B E Journal of Economic Analysis & Policy ◽

10.2202/1935-1682.2790 ◽

2011 ◽

Vol 11 (1) ◽

Cited By ~ 2

Author(s):

Luca Spinesi

Keyword(s):

Wage Inequality ◽

Patent Protection ◽

Skill Premium ◽

Elasticity Of Substitution ◽

Endogenous Technological Change ◽

Wide Range ◽

Patent Enforcement ◽

Ipr Protection ◽

The Eu ◽

Innovation Incentives

Abstract Using a general equilibrium framework, this paper shows that imperfect and heterogeneous patent protection across industries affects the relative innovation incentives of firms and the skill premium. It is found that tighter patent enforcement in some industries allows a patent enforcement externality effect to emerge, whereby varieties with relatively softer patent protection have relatively stronger innovation incentives. The theoretical mechanisms hold for a wide range of the elasticity of substitution between varieties and also hold in a North-South framework when IPR harmonization is considered. A numerical simulation shows that merging both endogenous technological change and institutional aspects in the form of imperfect and heterogeneous IPR protection can contribute to explaining the different innovation and wage inequality performances of the U.S. and the EU regions.

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Price-Dependent Demand in Spatial Models

The B E Journal of Economic Analysis & Policy ◽

10.1515/1935-1682.3126 ◽

2012 ◽

Vol 12 (1) ◽

Cited By ~ 4

Author(s):

Yiquan Gu ◽

Tobias Wenzel

Keyword(s):

Spatial Models ◽

Transportation Cost ◽

Optimal Level ◽

Fixed Cost ◽

Price Equilibrium ◽

Demand Functions ◽

City Model ◽

Insufficient Entry ◽

Dependent Demand ◽

Number Of Firms

Abstract This paper introduces price-dependent individual demand into the circular city model of product differentiation. We show that for any finite number of firms, an unique symmetric price equilibrium exists provided that demand functions are not “too” convex. As in the case of unit demand, the number of firms under free entry decreases in the fixed cost of entry while increases in the transportation cost of consumers. However, this number is no longer always in excess of the socially optimal level. Insufficient entry occurs when the fixed and transportation costs are high.

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HOW POWERFUL ARE NETWORK EFFECTS? A SKILL-BIASED TECHNOLOGICAL CHANGE APPROACH

Macroeconomic Dynamics ◽

10.1017/s1365100518000524 ◽

2018 ◽

Vol 24 (4) ◽

pp. 882-919 ◽

Cited By ~ 1

Author(s):

Oscar Afonso ◽

Manuela Magalhäes

Keyword(s):

Technological Change ◽

Wage Inequality ◽

Network Effects ◽

Relative Increase ◽

Skill Premium ◽

Market Size ◽

Skilled Workers ◽

Biased Technological Change ◽

The Face ◽

Knowledge Bias

Even for the standard skill-biased technological change (SBTC) literature, the generic rise in the skill premium in the face of the relative increase in skilled workers since the 1980s seems a little puzzling. We develop a general equilibrium SBTC growth model that allows the dominance of either the price channel or the market-size channel mechanism through which network spillovers affect the technological-knowledge bias and, thus, the paths of intra-country wage inequality. The proposed mechanisms can accommodate facts not explained by the earlier literature.

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Use of water-soluble polysaccharides from mango (Mangifera indica L.) fruits as alternative source of mutanase inductors

Planta Medica ◽

10.1055/s-0032-1321038 ◽

2012 ◽

Vol 78 (11) ◽

Author(s):

A Wiater ◽

K Próchniak ◽

M Janczarek ◽

M Pleszczyńska ◽

M Tomczyk ◽

...

Keyword(s):

Mangifera Indica ◽

Water Soluble ◽

Alternative Source

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EDITORIAL: Migration and competitiveness: Japan and the United States

MIGRATION LETTERS ◽

10.33182/ml.v10i2.138 ◽

2013 ◽

Vol 10 (2) ◽

pp. 115-124

Author(s):

Philip L. Martin

Keyword(s):

United States ◽

The United States ◽

Variable Cost ◽

Fixed Cost ◽

Special Issue ◽

Science And Engineering ◽

The Past ◽

Past Half Century ◽

Key Sectors ◽

Past Half

Japan and the United States, the world’s largest economies for most of the past half century, have very different immigration policies. Japan is the G7 economy most closed to immigrants, while the United States is the large economy most open to immigrants. Both Japan and the United States are debating how immigrants are and can con-tribute to the competitiveness of their economies in the 21st centuries. The papers in this special issue review the employment of and impacts of immigrants in some of the key sectors of the Japanese and US economies, including agriculture, health care, science and engineering, and construction and manufacturing. For example, in Japanese agriculture migrant trainees are a fixed cost to farmers during the three years they are in Japan, while US farmers who hire mostly unauthorized migrants hire and lay off workers as needed, making labour a variable cost.

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Potential of Palm Oil Empty Fruit Bunch as Biogas Substrate

ICONIET PROCEEDING ◽

10.33555/iconiet.v2i1.11 ◽

2019 ◽

Vol 2 (1) ◽

pp. 59-64

Author(s):

Vincentius Vincentius ◽

Evita H. Legowo ◽

Irvan S. Kartawiria

Keyword(s):

Palm Oil ◽

Fermentation Process ◽

Biogas Production ◽

Wastewater Sludge ◽

Empty Fruit Bunch ◽

Alternative Source ◽

The Earth ◽

The One ◽

Wet Fermentation ◽

Water Ratio

Natural gas is a source of energy that comes from the earth which is depleting every day, an alternative source of energy is needed and one of the sources comes from biogas. There is an abundance of empty fruit bunch (EFB) that comes from palm oil plantation that can become a substrate for biogas production. A methodology of fermentation based on Verein Deutscher Ingenieure was used to utilize EFB as a substrate to produce biogas using biogas sludge and wastewater sludge as inoculum in wet fermentation process under mesophilic condition. Another optimization was done by adding a different water ratio to the inoculum mixture. In 20 days, an average of 6gr from 150gr of total EFB used in each sample was consumed by the microbes. The best result from 20 days of experiment with both biogas sludge and wastewater sludge as inoculum were the one added with 150gr of water that produced 2910ml and 2185ml of gas respectively. The highest CH 4 produced achieved from biogas sludge and wastewater sludge with an addition of 150gr of water to the inoculum were 27% and 22% CH 4 respectively. This shows that biogas sludge is better in term of volume of gas that is produced and CH percentage.

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