For a developing economy with a given urban wage rate, globalization in capital markets strengthens labor unions. This result hinges on the fixed urban wage rate, which leads to a constant capital--labor ratio in the urban sector. Globalization via capital inflows not only enhances the...

This paper studies the impact of pay fairness on factor income and social welfare in a developing economy with both modern urban and traditional rural sectors. When urban workers become aware of income fairness, they use the expected urban wage and weighted average returns to capitalists as...

Using a dual structure depicting a developing economy, this paper shows that an increase in asset inequality can lead to wage inequality between skilled and unskilled labor. In addition, increasing asset inequality raises the luxury goods price and hence the unemployment ratio. These effects...

In developing countries of tourist destinations, an increase in medical tourism raises the wages in the medical tourism sector, thereby retaining skilled medical workers who otherwise leave the country. However, the expansion of medical tourism contracts the domestic healthcare services sector,...

We examine the short- and long-term effects of urbanization, via favorable urban development policies, on income distribution and social welfare for a developing country. The urban manufacturing sector is characterized by imperfect competition and free entry. Urbanization shifts rural workers to...