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Capital market distortion, agricultural producer service and wage inequality in the small-scale agriculture

Author

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  • Dianshuang Wang

    (Nanjing University
    Nanjing Forestry University)

  • Xiaochun Li

    (Nanjing University)

Abstract

Agriculture in developing countries operates on small-scale plots in general, which makes the direct utilization of durable capital equipment difficult. An intermediate sector is needed to facilitate the usage of capital. By accommodating the agricultural producer service sector, this paper builds three-sector general equilibrium models and investigates the impact of mitigation of capital market distortion on wage inequality between skilled and unskilled labor. The paper highlights the agricultural producer service sector and substitution between service and unskilled labor and arrives that mitigation of capital market distortion may widen wage inequality. The main conclusion is different from existing literature and provides new insights into this issue.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:anresc:v:69:y:2022:i:2:d:10.1007_s00168-022-01141-x
    DOI: 10.1007/s00168-022-01141-x
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    Cited by:

    1. Dianshuang Wang & Hongyun Huang & Xin Zhao & Fang Fang, 2023. "Green technological progress, agricultural modernization, and wage inequality: Lessons from China," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1673-1698, August.
    2. Dianshuang Wang & Xiaochun Li & Zixin Hu & Run Yuan, 2023. "Labor market distortion and its impact on wage inequality in the modernization of small‐scale agriculture," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(4), pages 988-1007, December.

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    More about this item

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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