FDI and Relative Wage Inequality

  • Sarbajit Chaudhuri
  • Ujjaini Mukhopadhyay


An important manifestation of inequality in the labour market is the inequality between the wages of skilled and unskilled labour. Empirical evidences suggest that the relative wage inequality has worsened in many of the developing countries after trade liberalization which is contrary to the predictions of the standard Heckscher–Ohlin (HO) model with Stolper–Samuelson theorem at its core. This calls for theoretical explanations. This chapter is devoted to offer such explanations in terms of a few simple general equilibrium models taking adequately into consideration some of the salient features of these countries like labour market imperfections, rural urban migration and presence and type of non-traded goods.


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Copyright information

© Springer India 2014

Authors and Affiliations

  • Sarbajit Chaudhuri
    • 1
  • Ujjaini Mukhopadhyay
    • 2
  1. 1.Department of EconomicsUniversity of CalcuttaKolkataIndia
  2. 2.Department of EconomicsBehala CollegeKolkataIndia

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