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Wage Differentials Across Labor Markets and Workers: Does Cost of Living Matter?

Author

Listed:
  • DuMond J.M.
  • Hisch, B.T.
  • Macpherson, D.A.

Abstract

Standard estimates of wage differentials rarely control for interarea differences in cost of living.his study develops an index for 182 metropolitan areas, comrising 65 percent of the US labour force. Wage equations are estimated using Current Population Survey earnings files for 1985093, based on nominal wages, wages fully adjusted for measured cost of living, and an approximation of "real" wages based on a simple regression adjustment for price level differences.

Suggested Citation

  • DuMond J.M. & Hisch, B.T. & Macpherson, D.A., 1996. "Wage Differentials Across Labor Markets and Workers: Does Cost of Living Matter?," Working Papers 1996_08_01, Department of Economics, Florida State University.
  • Handle: RePEc:fsu:wpaper:1996_08_01
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    References listed on IDEAS

    as
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    2. David E. Bloom & Gilles Grenier, 1993. "Language, Employment and Earnings in the United States: Spanish-English Differentials from 1970 to 1990," NBER Working Papers 4584, National Bureau of Economic Research, Inc.
    3. McManus, Walter & Gould, William & Welch, Finis, 1983. "Earnings of Hispanic Men: The Role of English Language Proficiency," Journal of Labor Economics, University of Chicago Press, vol. 1(2), pages 101-130, April.
    4. Montgomery, Edward, 1992. "Evidence on metropolitan wage differences across industries and over time," Journal of Urban Economics, Elsevier, vol. 31(1), pages 69-83, January.
    5. Gyourko, Joseph & Tracy, Joseph, 1991. "The Structure of Local Public Finance and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 774-806, August.
    6. Greenwood, Michael J, et al, 1991. "Migration, Regional Equilibrium, and the Estimation of Compensating Differentials," American Economic Review, American Economic Association, vol. 81(5), pages 1382-1390, December.
    7. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    8. Sahling, Leonard G & Smith, Sharon P, 1983. "Regional Wage Differentials: Has the South Risen Again?," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 131-135, February.
    9. Hanushek, Eric A, 1973. "Regional Differences in the Structure of Earnings," The Review of Economics and Statistics, MIT Press, vol. 55(2), pages 204-213, May.
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    11. Barry T. Hirsch & John L. Neufeld, 1987. "Nominal and Real Union Wage Differentials and the Effects of Industry and SMSA Density: 1973-83," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 138-148.
    12. Rosenbloom, Joshua L., 1996. "Was There a National Labor Market at the End of the Nineteenth Century? New Evidence on Earnings in Manufacturing," The Journal of Economic History, Cambridge University Press, vol. 56(03), pages 626-656, September.
    13. Bellante, Don, 1979. "The North-South Differential and the Migration of Heterogeneous Labor," American Economic Review, American Economic Association, vol. 69(1), pages 166-175, March.
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    15. Randall W. Eberts & Joe A. Stone, 1992. "Wage and Employment Adjustment in Local Labor Markets," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wea, November.
    16. repec:hoo:wpaper:e-94-11 is not listed on IDEAS
    17. Glaeser, E. L., 1998. "Should transfer payments be indexed to local price levels?," Regional Science and Urban Economics, Elsevier, vol. 28(1), pages 1-20, January.
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    More about this item

    Keywords

    WAGES ; LABOUR MARKET ; COST OF LIVING;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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