The Effects of Exogenous Technological Change on Wage Inequality in Rural India

2018 ◽  
Vol 19 (6) ◽  
pp. 1515-1537
Author(s):  
Arindam Banik ◽  
Pradip K. Bhaumik
Keyword(s):  
Wage Inequality ◽  
Poverty Reduction ◽  
Economic Benefits ◽  
Natural Setting ◽  
Skilled Workers ◽  
Economic Activities ◽  
Real Wages ◽  
Skilled Labour ◽  
Unskilled Labour ◽  
Unskilled Workers

This article develops a theoretical model that studies the economic benefits to skilled rural artisans receiving toolkits under a given poverty reduction programme. The model encompasses the frameworks for understanding the relationship between the supply of skilled labour (artisans) with improved toolkits, changes in rural economic activities and the relative incomes. Consequently, it provides a natural setting to infer their empirical relevance. The counterfactual analysis from a large sample of data reveals that once the toolkits are provided to the rural skilled artisans, the artisans as a broad social group are more likely to have benefited from the programme. Less benefit can be, but is not necessarily, associated with poor education level and other assets owned by the rural artisans. More interestingly, while the real wages of skilled workers are expected to rise due to the use of skill-biased toolkits, the wages of unskilled workers may either remain unaffected or even fall. The issue of supply of skilled labour has, therefore, become an area of immense interest largely because of the rising inequality in the relative wages of skilled and unskilled labour.

Skilled-Unskilled Wage Inequality, Growth of Skilled Labour and Development Policies

2014 ◽  
Vol 5 (1) ◽  
Author(s):  
Manash Ranjan Gupta ◽  
Priya Brata Dutta
Keyword(s):  
Steady State ◽  
Wage Inequality ◽  
Open Economy ◽  
Relative Wage ◽  
Agricultural Product ◽  
Skilled Workers ◽  
Current Output ◽  
Skilled Labour ◽  
Traded Goods ◽  
Unskilled Labour

AbstractThis paper develops a small open economy model with three sectors and four factors – land, unskilled labour, skilled labour and capital. Two of these three sectors produce final traded goods of which one sector produces an agricultural product using land and unskilled labour and another sector produces a manufacturing product using skilled labour and capital. The third sector, called education sector produces a service using skilled labour and capital as inputs; and this service transforms unskilled workers into skilled workers. The current output is added to the existing stock of skilled labour at the next point of time. The paper first analyses various comparative static effects on skilled-unskilled relative wage in the static model where no factor endowment changes over time. Next, it analyses the long-run equilibrium properties in the dynamic model with intertemporal accumulation of skilled labour; and derives various comparative steady state effects on skilled unskilled relative wage. Comparative steady-state effects appear to be stronger than the corresponding comparative static effects.

scholarly journals International trade in services and inequalities

2016 ◽  
Vol 23 (5) ◽  
pp. 1069-1075 ◽  
Author(s):  
Sylvain Petit
Keyword(s):  
Wage Inequality ◽  
Developed Countries ◽  
Tourism Industry ◽  
Skilled Workers ◽  
Business Services ◽  
Long Run ◽  
Short Run ◽  
Unskilled Workers ◽  
Tourism Services ◽  
The Impact

This study investigates the impact of the international openness in tourism services trade on wage inequality between highly skilled, semi-skilled, and unskilled workers in the tourism industry. The sample covers 10 developed countries and expands over 15 years. A cointegrated panel data model and an error correction model were used to distinguish between the short- and long-run effects. The results are compared to those of openness of business services and manufactured goods. The findings point out that tourism increases wage inequality at the expense of the least skilled workers in the long run and the short run.

scholarly journals DIRECTED TECHNOLOGICAL CHANGE: A KNOWLEDGE-BASED MODEL

2013 ◽  
Vol 19 (1) ◽  
pp. 116-143 ◽  
Author(s):  
Tailong Li ◽  
Shiyuan Pan ◽  
Heng-fu Zou
Keyword(s):  
Technological Change ◽  
Wage Inequality ◽  
Scale Effects ◽  
Developed Countries ◽  
Skilled Workers ◽  
Developed Country ◽  
Knowledge Based ◽  
Biased Technological Change ◽  
Unskilled Workers ◽  
Directed Technological Change

In a knowledge-based growth model where skilled workers are used in innovation and production, skill-biased technological change may lower average R&D productivity via an innovation possibilities frontier effect that eliminates scale effects. We show that skill-biased technological change increases the skill premium even if the elasticity of substitution between skilled and unskilled workers is less than two. Trade between developed countries promotes skill-biased technological change, thus raising wage inequality. Trade between developed and developing countries has differing effects: it induces relatively skill-replacing technological change and lowers wage inequality in the developed country but has the opposite effects in the developing country. Finally, we show that trade can stimulate or hurt economic growth.

scholarly journals Fairness, Search Frictions, and Offshoring

2013 ◽  
Vol 13 (1) ◽  
pp. 137-172 ◽  
Author(s):  
Devashish Mitra ◽  
Priya Ranjan
Keyword(s):  
Wage Inequality ◽  
Open Economy ◽  
Closed Economy ◽  
Skilled Workers ◽  
Unemployment Rates ◽  
Unskilled Workers ◽  
Fairness Concerns ◽  
The Cost ◽  
The Impact

Abstract: Fairness considerations are introduced into the determination of wages in a two factor Pissarides-style model of search unemployment to study its implications for the unemployment rates of unskilled and skilled workers in both the closed economy case and when the economy can offshore some inputs. Both fairness concerns and offshoring of jobs done by unskilled workers create the overhiring effect for skilled workers. An increase in the concern for fairness in the closed economy increases the cost of hiring unskilled workers and increases the unemployment rates of both types of workers; however, wage inequality decreases. In the open economy case, an increase in the concern for fairness leads to greater offshoring which prevents skilled unemployment from increasing, but the unemployment of unskilled workers increases. A reduction in the cost of offshoring also increases offshoring and increases the unemployment of unskilled workers, but has a positive effect on skilled workers. Due to the presence of an overhiring effect in the hiring of skilled workers for both offshoring and non-offshoring firms, skilled workers experience higher wages and lower unemployment. The opposite movements in skilled and unskilled unemployment render the net effect ambiguous. Even though wage inequality increases, the impact on the wages of unskilled workers is ambiguous.

Globalisation, crime and wage inequality: a theoretical analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manash Ranjan Gupta
Keyword(s):  
General Equilibrium ◽  
Wage Inequality ◽  
Open Economy ◽  
Small Open Economy ◽  
The Other ◽  
Skilled Workers ◽  
Production Sector ◽  
Content Type ◽  
Unskilled Labour ◽  
Rental Rate

Purpose This study aims to focus on the effects of economic globalisation programme on the problems of criminal activities and on the degree of skilled–unskilled wage inequality. Design/methodology/approach A competitive general equilibrium model of a small open economy is developed. Unskilled labour moves from the production sector to the criminal sector. Those who join the criminal sector snatch a part of capitalists’ income and skilled workers’ income to finance their consumption and face positive probability of being caught and punished. The size of the criminal sector and the rental rate on capital are simultaneously determined in the short-run equilibrium of this model where factor endowments are exogenously given at a particular point of time. Findings An increase in the capital endowment resulting from an exogenous foreign capital inflow raises demand for labour and wage rates in both the sectors. So, it lowers the rental rate on capital and thus aggravates the problem of skilled–unskilled wage inequality because the skilled labour using sector is more capital intensive than the other production sector. However, it may lower the size of the criminal sector and thus may raise the level of the gross domestic product. Originality/value There exists substantial theoretical works on the problem of skilled–unskilled wage inequality, but none of these works focuses on the general equilibrium allocation of unskilled labour to the criminal sector. On the other hand, existing models specialised to analyse theoretical implications of crime and punishment do not focus on the interaction between crime and wage inequality.

scholarly journals Offshoring and Directed Technical Change

2015 ◽  
Vol 7 (3) ◽  
pp. 84-122 ◽  
Author(s):  
Daron Acemoglu ◽  
Gino Gancia ◽  
Fabrizio Zilibotti
Keyword(s):  
Wage Inequality ◽  
Technical Change ◽  
Profit Maximization ◽  
Real Wages ◽  
Industrial Countries ◽  
Directed Technical Change ◽  
Initial Cost ◽  
Ricardian Model ◽  
Unskilled Workers ◽  
Factor Bias

We study the implications of offshoring on innovation, technology, and wage inequality in a Ricardian model with directed technical change. Profit maximization determines both the extent of offshoring and the direction of technological progress. A fall in the offshoring cost induces technical change with an ambiguous factor bias. When the initial cost of offshoring is high, an increase in offshoring opportunities causes a fall in the real wages of unskilled workers in industrial countries, skill-biased technical change and rising skill premia. When the offshoring cost is sufficiently low, instead, offshoring induces technical change biased in favor of the unskilled workers. (JEL J24, J31, L24, O33)

scholarly journals Skill-biased technological change: The case of the MENA region

2016 ◽  
Vol 61 (210) ◽  
pp. 101-116
Author(s):  
Sirine Mnif
Keyword(s):  
Technological Change ◽  
Diffusion Of Innovation ◽  
Negative Relationship ◽  
Mena Region ◽  
Skilled Labour ◽  
Transmission Mechanisms ◽  
Unskilled Labour ◽  
Unskilled Workers ◽  
Technological Bias

Our work treats the relationship between inequality and technological change. Specifically, we focus on the transmission mechanisms by which technological innovation affects inequality in access to employment. The objective of this article is to determine the effect of the diffusion of innovation on the demand for skilled and non-skilled labour. It focuses on the concept of technological bias and the role of inequality between skilled and unskilled workers. The empirical validation of this work is based on the technique of the dynamic panel. An estimate using the method of Arellano and Bond seems more relevant. There is a positive relationship between innovation and the demand for skilled labour but a negative relationship with unskilled labour. This result is confirmed in our sample of countries.

Differential Education Subsidy Policy and Wage Inequality Between Skilled, Semi-skilled and Unskilled Labour: A General Equilibrium Approach

2021 ◽  
pp. 097226612110031
Author(s):  
Ujjaini Mukhopadhyay
Keyword(s):  
Higher Education ◽  
General Equilibrium ◽  
Wage Inequality ◽  
Manufacturing Sector ◽  
Skill Formation ◽  
Trade Off ◽  
Skilled Labour ◽  
Unskilled Workers ◽  
Education Subsidy ◽  
Wage Inequalities

The article investigates the effects of secondary (including vocational) and higher-education subsidies on wage inequalities between skilled, semi-skilled and unskilled workers, and unemployment in a small open developing economy in terms of a two-sector Harris–Todaro dynamic general equilibrium framework. The results show that skilled–unskilled and skilled–semi-skilled wage inequalities depend on factor intensity conditions, while semi-skilled–unskilled wage inequality is determined by the level of skill formation in the economy. There is a trade-off between the wage inequalities of skilled–semi-skilled and semi-skilled–unskilled workers due to secondary education subsidy; the trade-off also exists with respect to higher-education subsidy if the manufacturing sector is more skilled labour intensive. However, if the manufacturing sector is capital intensive, higher-education subsidy is detrimental for both types of wage inequalities in the initial years of skill formation but might have favourable effects when the skill endowment is high. Both types of subsidies reduce unemployment in the initial periods, but higher-education subsidy accentuates it when skilled labour supply expands in the economy.

Renewable Energy Resources for Better Economics and Sustainable Living in Rural and Desert Areas

2019 ◽  
Vol 10 (12) ◽  
pp. 1165-1171
Author(s):  
Karl Gatterer ◽  
◽  
Salah Arafa ◽  
Keyword(s):  
Renewable Energy ◽  
Poverty Reduction ◽  
Energy Resources ◽  
Green Economy ◽  
Renewable Energy Resources ◽  
Economic Activities ◽  
Energy Materials ◽  
Sustainable Living ◽  
Sustainable Community Development ◽  
Access To Knowledge

Reliable and affordable energy is the key for the socio-economic development in rural and desert communities worldwide. While energy can be used for consumption purposes such as Lighting, Access to Information, Comfort and Entertainment, productive use of renewable energy is the key enabler for SMEs and Economy to grow. The paper examines the complex interactions among Energy, Materials, Water, Food, Building, Employment and Environment. It also discusses the implementation of renewable energy technologies to overcome some of barriers faced by rural villages and desert communities. It shows some of the special applications and approaches used over the past few decades in energy conversion, consumption and conservation to achieve poverty reduction, social justice and sustainable development. Field experiences in Basaisa projects, Egypt showed that open free dialogues with all stakeholders, site-specific education and training, appropriate local financing systems and access to knowledge are key-elements and essential factors for achieving green economy and sustainable community development. The coming decade will see a continued expansion of knowledge about renewable energy resources and its useful applications as systems friendly to the environment and as tools for economic activities, sustainable living and growth in rural and desert communities.

Abstract P036: Socioeconomic Status and Risk of Diabetes over 35 Years

Circulation ◽  
2012 ◽  
Vol 125 (suppl_10) ◽  
Author(s):  
Lena M Bjorck ◽  
Christina Stahl-Heden ◽  
Masuma Novak ◽  
Wai Giang Kok ◽  
Annika Rosengren
Keyword(s):  
Socioeconomic Status ◽  
Population Sample ◽  
Diabetes Type 2 ◽  
Diabetes Type ◽  
Low Ses ◽  
Occupational Class ◽  
Skilled Workers ◽  
Unskilled Workers

Background and aim: The link between low socioeconomic status (SES) and CHD is well established but whether low SES is also an independent predictor for development of diabetes type 2 is not clear. The aim of this study was to investigate whether SES, measured as occupational class, predicted subsequent development of diabetes type 2 over an extended follow-up. Methods: A total of 6941 men 47-55 years old, without prior diabetes, from a population sample of 9998 men, were investigated during 1970-73. Of the men, 23.7% were unskilled workers, 27.2% were skilled workers, 19.7% occupied either a supervisory manual position or were lower officials, 17.9% were officials at an intermediate position, and 11.6% were professionals, executives or senior officials. Follow-up was achieved through the national Swedish patient registry. Results: A total of 900 men (13%) were registered at any time with a diagnosis of diabetes over a 35-year follow-up. Compared with men in the highest occupational class, men with intermediate non-manual occupations had a multiple-adjusted hazard ratio (HR) of 1.10, 95% confidence interval (CI) 0.84-1.44, lower officials and foremen had an HR of 1.37 (1.06-1.78), semiskilled and skilled workers 1.39 (1.08-1.78), and unskilled workers 1.66 (1.30-2.13) after adjustment for smoking at baseline, BMI, blood pressure, serum cholesterol, treatment for hypertension and leisure time physical activity. Conclusions: Low SES is an independent risk factor for long-term risk of diabetes in men, with a 66% independent higher risk in unskilled workers, compared to professionals/senior officials.

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