15 , 2018-03-06 , Graduate School of Economics and Osaka School of International Public Policy (OSIPP) Osaka University
This paper examines how transport costs affect wage inequality. Goods produced by the unskilled must pay higher transport costs because they have low market values. Reduction in transportation cost changes the relative wage. At first, only the skilled gains from the transportation improvement. Then the unskilled also gains from international trade. Therefore, transportation development causes Kuznets curve.