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Contact-Intensity, Disruptions In The Cultural Sector And Wage Inequality: A Model Of Covid-19 Crisis And Its Impact

Author

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  • SUGATA MARJIT

    (School of Accounting and Finance. M715, 7/F, Li Ka Shing Tower, Hong Kong Polytechnic University Business School, Kowloon, Hong Kong2Indian Institute of Foreign Trade, Kolkata, India3Centre for Studies in Social Sciences, Kolkata, India)

  • GOURANGA G. DAS

    (Hanyang University, ERICA Campus, 55 Hanyang-Daehak-ro, Sangrok-gu, 15588 Ansan-si, Gyeonggi-do, South Korea5Centre for Development Economics and Sustainability (CDES), Monash University, Melbourne, Australia)

Abstract

COVID-19 has adverse impacts on contact-intensive sectors, viz., manufacturing, tourism, and the entertainment sector (ES). In a general equilibrium (GE) model with online, entertainment and informal sectors employing skill, unskilled, and capital, we show that COVID-19 could cause polarization pushing contact-intensive entertainment industry on the brink of collapse while the other two survive. Dual roles of factor intensity and contact intensity (CI) contribute to such finite changes, triggering inter-skill wage inequality. This is the first of its kind to offer a theoretical mechanism capturing the contractionary effects on contact-intensive sectors and wage inequality. These results match with the literature emphasizing the hardships faced by the cultural sector.

Suggested Citation

  • Sugata Marjit & Gouranga G. Das, 2024. "Contact-Intensity, Disruptions In The Cultural Sector And Wage Inequality: A Model Of Covid-19 Crisis And Its Impact," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 69(05), pages 1717-1742, September.
    • Handle: RePEc:wsi:serxxx:v:69:y:2024:i:05:n:s0217590824420049
    DOI: 10.1142/S0217590824420049
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    Keywords

    Wage-gap; COVID-19; contact-intensive; cultural sector; general equilibrium; quasi-specific; social-distancing;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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