Organized crime and wage inequality

Pi, Jiancai; Zhang, Pengqing

doi:10.1111/sjpe.12238

Cited by 3 publications

(1 citation statement)

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“…These studies hold the opinions that the rise of public expenditure, collective enforcement and income redistribution are effective ways to restrain appropriation in principles of marginal cost and marginal revenue. The third strand of literature on appropriation concerns about how appropriation affects economic variables, such as economic growth, income distribution, resources allocation and welfare (e.g., Benhabib & Rustichini, 1996; Esteban & Ray, 1999; Grossman & Kim, 1995; Pi & Zhang, 2017, 2020; Varian, 1989; Yu & Chao, 2021). However, the existing literature neglects to link appropriation with rural–urban migration, the minimum wage and unemployment.…”

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confidence: 99%

Appropriation, migration, and unemployment

Duan

2023

Australian Economic Papers

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This article builds general equilibrium models to explore the relationship among appropriation, rural–urban migration, the minimum wage and unemployment. We find that the proportion of appropriated capital plays a key role in the effects of appropriation on unemployment and rural–urban migration. When the proportion of appropriated capital is large, a stronger control on appropriation by the government results in a lower unemployment rate and more rural–urban migrants, and vice versa. In the extended models, the conclusion may be different when the plundered factor changes from capital to land. In the situation with the agricultural sector employing unskilled labour and capital, appropriation has no impact on unemployment, and the effect on migration remains the same. We also discuss the implications of the minimum wage, and find that under plausible conditions, the rise of the minimum wage can alleviate appropriation and reduce unemployment. The situation of migration is ambiguous due to the impacts of two opposite factors.

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