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Capital Concentration and Wage Inequality

Author

Listed:
  • Pi Jiancai

    (Department of Economics, Nanjing University, 22 Hankou Road, Nanjing 210093, Jiangsu, China)

  • Fan Yanwei

    (Department of Economics, Nanjing University, 22 Hankou Road, Nanjing 210093, Jiangsu, China)

Abstract

This paper analyzes how capital concentration affects wage inequality through the channel of financial frictions. Higher capital concentration can be regarded as the Piketty effect. Under the framework of cost constrained financial frictions, we find that higher capital concentration will expand (resp. narrow down) wage inequality if the asset-liability ratio in the skilled sector is high (resp. low) enough relative to that in the unskilled sector.

Suggested Citation

  • Pi Jiancai & Fan Yanwei, 2020. "Capital Concentration and Wage Inequality," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 20(1), pages 1-9, January.
    • Handle: RePEc:bpj:bejtec:v:20:y:2020:i:1:p:9:n:25
    DOI: 10.1515/bejte-2019-0049
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    Citations

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    Cited by:

    1. Leonard F. S. Wang & Ji Sun, 2023. "Corporate profit tax, firm entry with unemployment, and income inequality," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 380-392, April.
    2. Jiancai Pi & Kaiqi Zhang & Xiangyu Huang, 2023. "Financial globalization and wage inequality," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(2), pages 144-157, May.
    3. Jiancai Pi & Yanwei Fan, 2022. "Financial frictions and wage inequality," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 1064-1074, January.
    4. Chi‐Chur Chao & Leonard F. S. Wang, 2022. "Corporate governance, firm dynamics, and wage inequality," Manchester School, University of Manchester, vol. 90(3), pages 341-353, June.

    More about this item

    Keywords

    capital concentration; wage inequality; financial frictions;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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