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Financial Discrimination And Wage Inequality In China

Author

Listed:
  • JIANCAI PI

    (Department of Economics, School of Business, Nanjing University, 22 Hankou Road, Nanjing 210093, P. R. China)

  • PENGQING ZHANG

    (Department of Economics, School of Business, Nanjing University, 22 Hankou Road, Nanjing 210093, P. R. China)

Abstract

This paper investigates how financial discrimination influences skilled-unskilled wage inequality in China. In the basic model, we find that a reduction of financial discrimination will reduce skilled-unskilled wage inequality. In the extended model, we find that skilled-unskilled wage inequality will be narrowed down if and only if the substitution elasticity of unskilled labor and the intermediate product in the private sector is larger than that of the skilled labor and capital in the public sector. When considering the reality of China, we predict that a reduction of financial discrimination leads to the decline of wage inequality.

Suggested Citation

  • Jiancai Pi & Pengqing Zhang, 2024. "Financial Discrimination And Wage Inequality In China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 69(08), pages 2597-2614, December.
    • Handle: RePEc:wsi:serxxx:v:69:y:2024:i:08:n:s0217590821500107
    DOI: 10.1142/S0217590821500107
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    More about this item

    Keywords

    Financial discrimination; skilled-unskilled wage inequality; general equilibrium approach; Chinese economy;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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