Contact-Intensity, Collapsing Entertainment Sector and Wage Inequality: A Finite Change Model of COVID-19 Impact
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Abstract
In a general equilibrium model with online, entertainment and informal sectors employing skill, unskilled, and capital, we show that Covid-19 could cause polarization pushing contact-intensive entertainment industry on the brink of collapse while other two survive. Dual roles of factor-intensity and contact-intensity contribute to such finite changes, triggering inter-skill wage inequality.
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