International factor mobility,environmental pollution and skilled–unskilled wage inequality in developing countries |
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| Institution: | 1. Department of Economics, Nanjing University, China;2. The Johns Hopkins University–Nanjing University Center for Chinese and American Studies, China;1. THEMA, Université de Cergy-Pontoise and CREST, France;2. European Central Bank, Germany;3. Banque de France, International Macroeconomics Division, France |
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| Abstract: | This paper establishes a static three-sector general equilibrium model by accommodating environmental pollution to investigate the impact exerted by skilled immigrants and foreign direct investment on the skilled–unskilled wage inequality. Environment is treated as an input for agricultural production. The production process of the urban low-skill sector generates environmental pollution, which deteriorates the rural environment and thereby influences agricultural production. The present paper highlights the role of environmental pollution in the determination of the skilled–unskilled wage inequality due to skilled immigrants and foreign direct investment. |
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