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Corruption And Real Wages In General Equilibrium Trade Models

Author

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  • Soumyatanu Mukherjee

    (Indian Institute of Technology (IIT), Kharagpur)

  • Thasni T

    (Indian Institute of Management Kozhikode)

Abstract

The present paper explores the impact of corruption on the real wage of informal sector workers in a general equilibrium model of production and trade. The proposed general equilibrium model is a two-sector two-factor framework that models segmented labor market. There is a handful of literature examining the real wages on labor in a segmented labor market framework. This paper has been the first attempt to investigate that gap, the real wages in asegmented labor market with the existence of corruption and a unionized sector. We have come up with the striking finding that a reduction in the degree of corruption may benefit workers in the informal sector if the formal sector is relatively capital intensive in a value sense.

Suggested Citation

  • Soumyatanu Mukherjee & Thasni T, 2019. "Corruption And Real Wages In General Equilibrium Trade Models," Working papers 348, Indian Institute of Management Kozhikode.
    • Handle: RePEc:iik:wpaper:348
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    References listed on IDEAS

    as
    1. Sugata Marjit & Biswajit Mandal & Suryadipta Roy, 2014. "Trade Openness, Corruption and Factor Abundance: Evidence from a Dynamic Panel," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 45-58, February.
    2. Nunn, Nathan & Trefler, Daniel, 2014. "Domestic Institutions as a Source of Comparative Advantage," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 263-315, Elsevier.
    3. Andrei A. Levchenko, 2007. "Institutional Quality and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 791-819.
    4. Mukherjee , Soumyatanu, 2014. "Liberalisation and Jobless Growth in Developing Economy," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 450-469.
    5. Marjit, Sugata & Kar, Saibal, 2007. "Labor productivity growth, informal wage and capital mobility: A general equilibrium analysis," MPRA Paper 23912, University Library of Munich, Germany, revised 2008.
    6. Marjit, Sugata & Kar, Saibal & Chaudhuri, Sarbajit, 2011. "Recession in the skilled sector and implications for informal wage," Research in Economics, Elsevier, vol. 65(3), pages 158-163, September.
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    More about this item

    Keywords

    Corruption; Informal wage; Unionization; International Trade; Production linkages; Comparative advantage; Institutional quality; Informal sector; Sectoral allocation;
    All these keywords.

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