Abstract
We develop a method for identifying departures from relative factor price equality that is robust to unobserved variation in factor productivity. We implement this method using data on the relative wage bills of nonproduction and production workers across 170 local labor markets comprising the continental United States for 1972, 1992, and 2007. We find evidence of statistically significant differences in relative wages in all three years. These differences increase in magnitude over time and are related to industry structure in a manner that is consistent with neoclassical models of production.
Original language | English (US) |
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Pages (from-to) | 135-163 |
Number of pages | 29 |
Journal | American Economic Journal: Microeconomics |
Volume | 5 |
Issue number | 2 |
DOIs | |
State | Published - May 2013 |
All Science Journal Classification (ASJC) codes
- General Economics, Econometrics and Finance