Labor Market Shifts and the Price Puzzle Revisited
AbstractThis paper examines the relationship between price growth and skill intensity across 150 manufacturing industries between 1989 and 1995. There are two main findings. First, wage growth and intermediate goods price increases are passed through to final product prices roughly in proportion to their factor shares. Second, product prices have grown relatively less in sectors that more intensively utilize less-skilled labor. The latter finding is consistent with the Stolper-Samuelson theory of expanded trade with countries that are abundant in less-skilled workers, as well as with some models of technological change.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5924.
Date of creation: Feb 1997
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Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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- Jeffrey D. Sachs & Howard J. Shatz, 1994. "Trade and Jobs in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 1-84.
- Revenga, Ana L, 1992. "Exporting Jobs? The Impact of Import Competition on Employment and Wages in U.S. Manufacturing," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 255-84, February.
- Edward E. Leamer, 1992. "Wage Effects of A U.S. - Mexican Free Trade Agreement," NBER Working Papers 3991, National Bureau of Economic Research, Inc.
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