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Product Variety and Wage Inequality

Author

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  • Jiancai Pi

    (Department of Economics, Nanjing University)

  • Xiangyu Huang

    (Department of Economics, Nanjing University)

Abstract

This paper analyzes how product variety affects skilled-unskilled wage inequality. Through building several two-sector general equilibrium models, we find that an increase in product variety will expand wage inequality. This shows that the evolution of the product markets will generate a force to enlarge wage inequality.

Suggested Citation

  • Jiancai Pi & Xiangyu Huang, 2021. "Product Variety and Wage Inequality," Annals of Economics and Finance, Society for AEF, vol. 22(1), pages 135-151, May.
    • Handle: RePEc:cuf:journl:y:2021:v:22:i:1:pihuang
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    More about this item

    Keywords

    Product variety; Skilled-unskilled wage inequality; General equilibrium model;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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