What question did this study set out to answer?

To investigate how endogenous structural change and labor mobility frictions influence the joint evolution of income and wealth inequality during economic modernization.

October 1, 2023Central European Journal of Economic Modelling and EconometricsOpen Access

Endogeneous Structural Change in General Equilibrium

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Authors

KMKrzysztof MakarskiNational Bank of Poland JTJoanna TyrowiczNational Research Centre for Grapes

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Implication

Computational modeling demonstrates that labor mobility frictions exacerbate income inequality while younger workers' mobility moderates wealth disparity in post-1990 Poland, highlighting complex...

Key Points

To investigate how endogenous structural change and labor mobility frictions influence the joint evolution of income and wealth inequality during economic modernization.
Constructed a two-sector (manufacturing and services) general equilibrium overlapping generations model featuring heterogeneous individuals.
Modeled asymmetric total factor productivity growth driving labor reallocation alongside sectoral mobility frictions calibrated to post-1990 Poland.
Labor mobility frictions impede the transition of workers from manufacturing to services, elevating relative service wages and widening income inequality.
Structural change generates competing wealth effects: widening wage dispersion increases savings inequality, but high mobility among asset-poor young workers increases their savings and partially equalizes the wealth distribution.

Cite This Study

Makarski et al. (2023) studied this question.

synapsesocial.com/papers/6a82dd710de57fd8eeb298ab https://doi.org/10.24425/cejeme.2023.147909

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Implication

Computational modeling demonstrates that labor mobility frictions exacerbate income inequality while younger workers' mobility moderates wealth disparity in post-1990 Poland, highlighting complex...

Endogeneous Structural Change in General Equilibrium

Discussion

Member takes

Implication

Key Points

Cite This Study

Endogeneous Structural Change in General Equilibrium

Discussion

Member takes

Implication

Key Points

Cite This Study

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