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Are the U.S. farm wages equalizing? Markov chain approach

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  • Temel, Tugrul

Abstract

This study investigates convergence in hired farm wages in U.S. counties over the period 1978-92. The time-invariant distribution of wages is characterized using Markov chains. This study is concerned with two questions: Are regional hired farm wages moving in the same direction? If so, are they consistent with the direction of the entire U.S. farm wages? Concerning with e¢ ciency in agricultural labor markets, the study approximates it to the extent that it is re�ected in farm wages. Time-invariant distributions of wages are calculated for the Northeast, Midwest, South, and West region, and for the entire U.S. The results support the hypothesis of convergence at regional level to lower-than-respective regional average wage. Convergence is the strongest in the Northeast and the weakest in the South. Likewise, convergence to lower-than-average wage is present at the U.S. level, but it is stronger than that at the regional level.

Suggested Citation

  • Temel, Tugrul, 2011. "Are the U.S. farm wages equalizing? Markov chain approach," MPRA Paper 31930, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:31930
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    File URL: https://mpra.ub.uni-muenchen.de/31930/1/MPRA_paper_31930.pdf
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    References listed on IDEAS

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    4. Elias G. Carayannis & Rajiv Mallick, 1996. "Regional Income Disparities In Canada: Implications For Theories Of Regional Convergence," The Review of Regional Studies, Southern Regional Science Association, vol. 26(1), pages 55-74, Summer.
    5. Douglas Robertson, 1995. "Are banks converging to one size?," Working Papers 95-29, Federal Reserve Bank of Philadelphia.
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    8. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 367-397.
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    More about this item

    Keywords

    farm wage movements; labor markets; convergence; Markov chains; U.S. agriculture.;

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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