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Trade, location, and wages in the United States

  • Knaap, Thijs

This paper estimates a spatial wage structure for the United States.I employ the market-access and supplier-access method of Reddingand Venables (2004), where access is determined using interstate tradedata. Economic geography models predict that state-level wages arecorrelated to this measure, owing to higher levels of demand and betteravailability of intermediate goods in easily accessible regions. Aftercorrecting for omitted-variable bias with exogenous ‘first nature’ regressorsand using the appropriate instruments, I find that the explanatorypower of access-variables is weak in this dataset.

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File URL: http://www.sciencedirect.com/science/article/pii/S0166-0462(06)00049-4
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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 36 (2006)
Issue (Month): 5 (September)
Pages: 595-612

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Handle: RePEc:eee:regeco:v:36:y:2006:i:5:p:595-612
Contact details of provider: Web page: http://www.elsevier.com/locate/regec

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  1. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Venables, Anthony J, 1993. "Equilibrium Locations of Vertically Linked Industries," CEPR Discussion Papers 802, C.E.P.R. Discussion Papers.
  3. Annekatrin Niebuhr, 2006. "Market access and regional disparities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(2), pages 313-334, June.
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  5. Overman, Henry G & Redding, Stephen J. & Venables, Anthony J, 2001. "The Economic Geography of Trade Production and Income: A Survey of Empirics," CEPR Discussion Papers 2978, C.E.P.R. Discussion Papers.
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  8. Combes, Pierre-Philippe & Overman, Henry G., 2004. "The spatial distribution of economic activities in the European Union," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 64, pages 2845-2909 Elsevier.
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  14. Stephen Redding & Anthony J. Venables, 2001. "Economic geography and international inequality," LSE Research Online Documents on Economics 3714, London School of Economics and Political Science, LSE Library.
  15. Alesina, Alberto & Spolaore, Enrico & Wacziarg, Romain, 2005. "Trade, Growth and the Size of Countries," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 23, pages 1499-1542 Elsevier.
  16. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  17. Steven Brakman & Harry Garretsen & Marc Schramm, 2002. "The Strategic Bombing of German Cities during World War II and its Impact on City Growth," CESifo Working Paper Series 808, CESifo Group Munich.
  18. Holger C. Wolf, 2000. "Intranational Home Bias In Trade," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 555-563, November.
  19. Deardoff, A.V., 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," Working Papers 382, Research Seminar in International Economics, University of Michigan.
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  21. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, March.
  22. Thierry Mayer & Keith Head, 2002. "Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade," Working Papers 2002-01, CEPII research center.
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