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Relative Wage Variation and Industry Location


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; London School of Economics (LSE); Centre for Economic Policy Research (CEPR)

Peter K. Schott


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

Helen Simpson


CMPO; Institute for Fiscal Studies (IFS)
January 2004

CEPR Discussion Paper No. 4213

Abstract:     
Relative wages vary considerably across regions of the United Kingdom, with skill-abundant regions exhibiting lower skill premia than skill-scarce regions. This Paper shows that the location of economic activity is correlated with the variation in relative wages. UK regions with low skill premia produce different sets of manufacturing industries than regions with high skill premia. Relative wages are also linked to subsequent economic development: over time, increases in the employment share of skill-intensive industries are greater in regions with lower initial skill premia. Both results suggest firms adjust production across and within regions in response to relative wage differences.

Number of Pages in PDF File: 29

Keywords: De-industrialization, relative factor prices, diversification cones

JEL Classification: C14, F11, F14

working papers series


Date posted: February 11, 2004  

Suggested Citation

Bernard, Andrew B., Redding, Stephen J., Schott, Peter K. and Simpson, Helen, Relative Wage Variation and Industry Location (January 2004). CEPR Discussion Paper No. 4213. Available at SSRN: http://ssrn.com/abstract=502126

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 (Contact Author)
Princeton University ( email )
Princeton, NJ 08544-1021
United States
HOME PAGE: http://www.princeton.edu/~reddings/
London School of Economics (LSE) ( email )
Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 7483 (Phone)
+44 20 7831 1840 (Fax)
HOME PAGE: http://econ.lse.ac.uk/~sredding/
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Peter K. Schott
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
Helen Simpson
CMPO ( email )
University of Bristol
2 Priory Road
Bristol, BS8 ITX
United Kingdom
Institute for Fiscal Studies (IFS) ( email )
7 Ridgmount Street
London, WC1E 7AE
United Kingdom
+44 20 7291 4800 (Phone)
+44 20 7323 4780 (Fax)
Feedback to SSRN (Beta)


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References:  17
Citations:  5

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