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Skill formation, environmental pollution, and wage inequality

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  • Pengqing Zhang

    (Nanjing University)

Abstract

This paper studies the effects of government-led skill formation on environmental quality and the skilled–unskilled wage gap through the three-sector general equilibrium approach. The process of skill formation is divided into two periods. In the basic model, an increase in the subsidy on skill formation can improve the environment in both periods, but may widen or narrow down the wage gap, depending on the relative capital intensities of the urban sectors, and on the environmental dependence of the rural sector. In the presence of urban unemployment, the main results of the basic model still more or less hold. This paper suggests that, although the subsidy on skill formation does not necessarily reduce wage inequality, it does serve as an effective policy to improve environmental quality.

Suggested Citation

  • Pengqing Zhang, 2019. "Skill formation, environmental pollution, and wage inequality," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(2), pages 405-424, April.
    • Handle: RePEc:spr:anresc:v:62:y:2019:i:2:d:10.1007_s00168-019-00901-6
    DOI: 10.1007/s00168-019-00901-6
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    2. Dianshuang Wang & Xiaochun Li, 2022. "Capital market distortion, agricultural producer service and wage inequality in the small-scale agriculture," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(2), pages 391-409, October.

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    More about this item

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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