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Factor Price Equality and the Economies of the United States

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  • Andrew B. Bernard
  • Stephen Redding
  • Peter K. Schott

Abstract

We develop a methodology for identifying departures from relative factor price equality across regions that is valid under general assumptions about production, markets and factors. Application of this methodology to the United States reveals substantial and increasing deviations in relative skilled wages across labor markets in both 1972 and 1992. These deviations vary systematically with labor markets industry structure both in cross section and over time.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0696.

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Date of creation: Jul 2005
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Handle: RePEc:cep:cepdps:dp0696

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: Factor Price Equality; Regional Wages; Neoclassical Trade Theory; Labor Market Areas;

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References

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