Abstract

http://ssrn.com/abstract=1475708
 
 

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Testing for Factor Price Equality in the Presence of Unobserved Factor Quality Differences


Andrew B. Bernard


Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Stephen J. Redding


Princeton University

Peter K. Schott


Yale University - School of Management; National Bureau of Economic Research (NBER)

August 1, 2009

Tuck School of Business Working Paper No. 2009-71
US Census Bureau Center for Economic Studies Paper No. CES-WP 09-22

Abstract:     
We develop a method for identifying departures from relative factor price equality across regions that is valid under general assumptions about production, markets and factors. Application of this method to the United States reveals substantial and increasing deviations in relative skilled wages across labor markets in both 1972 and 1992. These deviations vary systematically with labor markets industry structure both in the cross section and over time.

Number of Pages in PDF File: 39

Keywords: Factor Price Equality, Regional Wages, Neoclassical Trade Theory, Labor Market

JEL Classification: F16, J30, R23, C14

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Date posted: September 20, 2009  

Suggested Citation

Bernard, Andrew B. and Redding, Stephen J. and Schott, Peter K., Testing for Factor Price Equality in the Presence of Unobserved Factor Quality Differences (August 1, 2009). Tuck School of Business Working Paper No. 2009-71; US Census Bureau Center for Economic Studies Paper No. CES-WP 09-22. Available at SSRN: http://ssrn.com/abstract=1475708 or http://dx.doi.org/10.2139/ssrn.1475708

Contact Information

Andrew B. Bernard
Dartmouth College - Tuck School of Business ( email )
100 Tuck Hall
Hanover, NH 03755
United States
603-646-0302 (Phone)
603-646-9084 (Fax)
HOME PAGE: http://mba.tuck.dartmouth.edu/pages/faculty/Andrew.Bernard/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Stephen J. Redding
Princeton University ( email )
Princeton, NJ 08544-1021
United States
HOME PAGE: http://www.princeton.edu/~reddings/
Peter K. Schott (Contact Author)
Yale University - School of Management ( email )
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-436-4260 (Phone)
203-436-6974 (Fax)
HOME PAGE: http://www.som.yale.edu/faculty/pks4
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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