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Licensed Unlicensed Requires Authentication Published by De Gruyter November 15, 2019

Capital Concentration and Wage Inequality

  • Jiancai Pi EMAIL logo and Yanwei Fan

Abstract

This paper analyzes how capital concentration affects wage inequality through the channel of financial frictions. Higher capital concentration can be regarded as the Piketty effect. Under the framework of cost constrained financial frictions, we find that higher capital concentration will expand (resp. narrow down) wage inequality if the asset-liability ratio in the skilled sector is high (resp. low) enough relative to that in the unskilled sector.

JEL Classification: J31; O16

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Published Online: 2019-11-15

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