Wage Inequality and Leisure Inequality between High-Skilled Agents and Low-Skilled Agents

• Main Authors: Li-Chien Chan, 詹禮謙
• Other Authors: 蔡宜展
• Format: Others
• Language: en_US
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/3sd7r9

碩士 === 國立臺灣大學 === 經濟學研究所 === 107 === This paper constructs an equilibrium theory to explain wage inequality and leisure inequality between high skilled agents and low-skilled agents. Following [1], our theory extends their theory to consider labor-leisure choice. This extension allows us to explore leisure inequality between high- and low-skilled agents in a knowledge economy. In our economy, knowledge is a necessary input in production and agents allocate their time on leisure and labor. An equilibrium allocation is determined by the optimal choices of agents that use knowledge to produce and consume a single good. Our main results show that both wage inequality and leisure inequality between high-skilled agents and low-skilled agents are caused by improvements in communication technology. Wage inequality is amplified by leisure inequality, leading to a dramatic difference in earnings. These results are consistent with empirical findings.