Endogeneous Structural Change in General Equilibrium

• Autorzy: Krzysztof Makarski , Joanna Tyrowicz
• Języki publikacji: EN

Abstrakty

EN

We study the evolution of income and wealth inequality in an economy undergoing endogenous structural change with imperfect labor mobility. Our economy features two sectors: services and manufacturing. With faster TFP growth in manufacturing, labor reallocates from manufacturing to services. This reallocation is slower due to labor mobility frictions, which in turn, raises relative wages in services. As a result, income inequality is higher. Moreover, we study the impact of structural change on wealth inequality. Its economic intuition is more ambiguous. On the one hand, increased income dispersion implies increased dispersion in the ability to accumulate wealth across individuals. On the other hand, younger workers who hold the least assets are the most mobile across sectors. Their incomes are improved, which boosts their savings, which works towards equalizing wealth distribution. The consequence of these changes can only be verified with a computational model. To this end, we construct an overlapping generations model with two sectors: manufacturing and services. Our model also features heterogeneous individuals. With our model, we are able to show how the structural change affected the evolution of income and wealth inequality in Poland as of 1990. (original abstract)

Słowa kluczowe

EN

Structural changes; Demographic transformation; Social-economics inequality

PL

Zmiany strukturalne; Przemiany demograficzne; Nierówności społeczno-gospodarcze

• Czasopismo: Central European Journal of Economic Modelling and Econometrics (CEJEME)
• Rocznik: 2023
• Tom: 15
• Numer: nr 3
• Strony: 215--239

Twórcy

autor

Krzysztof Makarski

• SGH Warsaw School of Economics, Poland

autor

Joanna Tyrowicz

• FAME|GRAPE, University of Regensbur; University of Warsaw

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Identyfikatory

DOI

10.24425/cejeme.2023.147909