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Labor Market Shifts and the Price Puzzle Revisited

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Alan B. Krueger

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Abstract

This 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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5924.

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Date of creation: Feb 1997
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Handle: RePEc:nbr:nberwo:5924

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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

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. 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(1994-1), pages 1-84. [Downloadable!]
  2. Edward E. Leamer, 1992. "Wage Effects of A U.S. - Mexican Free Trade Agreement," NBER Working Papers 3991, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  1. Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation by Skill," NBER Working Papers 5718, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Paolo Epifani & Gino Gancia, 2004. "The Skill Bias of World Trade," Economics Working Papers 833, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2007. [Downloadable!]
    Other versions:
  3. Gustavo Gonzaga & Naércio Menezes Filho & Cristina Terra, 2006. "Trade Liberalization and the Evolution of Skill Earnings Differentials in Brazil," Development Working Papers 216, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
    Other versions:
  4. R. E. Baldwin & G. G. Cain, . "Shifts in U.S. Relative Wages: The Role of Trade, Technology, and Factor Endowments," Institute for Research on Poverty Discussion Papers 1132-97, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
  5. Robert C. Feenstra & Gordon H. Hanson & Deborah L. Swenson, . "Offshore Assembly From The United States: Production Characteristics Of The 9802 Program," Department of Economics 98-10, California Davis - Department of Economics. [Downloadable!]
    Other versions:
  6. Nahuis, R., 1997. "On globalisation, trade and wages," Research Memorandum 747, Tilburg University, Faculty of Economics and Business Administration. [Downloadable!]
  7. James Harrigan & Rita Balaban, 1999. "U.S. Wages in General Equilibrium: The Effects of Prices, Technology, and Factor Supplies, 1963-1991," NBER Working Papers 6981, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Robert E. Baldwin & Glen G. Cain, 1997. "Shifts in U.S. Relative Wages: The Role of Trade, Technology and Factor Endowments," NBER Working Papers 5934, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Matthew J. Slaughter, 1998. "What Are the Results of Product-Price Studies and What Can We Learn From Their Differences?," NBER Working Papers 6591, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Leonardi, Marco, 2003. "Product Demand Shifts and Wage Inequality," IZA Discussion Papers 908, Institute for the Study of Labor (IZA). [Downloadable!]
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  11. Daron Acemoglu, 1999. "Patterns of Skill Premia," NBER Working Papers 7018, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
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