OxTalks will soon move to the new Halo platform and will become 'Oxford Events.' There will be a need for an OxTalks freeze. This was previously planned for Friday 14th November – a new date will be shared as soon as it is available (full details will be available on the Staff Gateway).
In the meantime, the OxTalks site will remain active and events will continue to be published.
If staff have any questions about the Oxford Events launch, please contact halo@digital.ox.ac.uk
Glenn Magerman will be presenting his paper on ‘Income inequality in general equilibrium’.
Paper abstract:
We study the impact of labor misallocation between sectors on economic growth and income inequality in a large class of economic models. We first provide a result for the impact of frictions to workers’ mobility in a one sector economy with perfect competition. We show that income inequality impacts negatively economic growth in this simple model and appears under the form of a partial change in the Theil index. Furthermore, we show that this result carries on in all models of economic growth, from the (Solow, 1957) model to the latest production network models. Next, we endogenize the frictions to workers’ mobility using of a Roy-Fréchet setup between sectors in a production network economy. The framework accommodates sectoral input-output linkages, arbitrary elasticities of factors and intermediates, and heterogeneous workers that endogenously choose to supply their labor across sectors. We characterize the impact of Harrod-neutral productivity shocks and changes in labor mobility on income inequality and real GDP. Inequality arises in equilibrium due to a combination of changes in income share and labor use across all sectors due to their dependencies in the input-output network. Our results suggest that labor market-improving policies can have strong effects on both real GDP and inequality, but the impact is qualitatively dependent on the structure of the economy and its initial equilibrium.
About the speaker:
Glenn Magerman is Associate Professor of Economics (with tenure) at ECARES, Université libre de Bruxelles. He is also a Research Affiliate at CEPR, and Fellow at VIVES. His research agenda focuses on production networks, trade, and industrial organization.
