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Vertical structure and wage inequality

Jiancai Pi et al.

International Journal of Economic Theory2026https://doi.org/10.1111/ijet.70013article
AJG 2ABDC B
Weight
0.50

Abstract

We analyze the role of vertical structure in wage inequality. By constructing general equilibrium models, we consider scenarios with unemployment, full employment, and separated unskilled labor markets. In an economy with unemployment, a reduction in the regulated upstream price will widen wage inequality if the substitution elasticity of factors in the variable cost is sufficiently small. In an economy with full employment, a decrease in the regulated upstream price will expand wage inequality. In an economy with separated unskilled labor markets, the results in the two aforementioned situations still hold. We further discuss how regulated upstream pricing affects social welfare.

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https://doi.org/https://doi.org/10.1111/ijet.70013

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@article{jiancai2026,
  title        = {{Vertical structure and wage inequality}},
  author       = {Jiancai Pi et al.},
  journal      = {International Journal of Economic Theory},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/ijet.70013},
}

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Vertical structure and wage inequality

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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