TY - JOUR
T1 - Do Local Relative Factor Supplies Affect Local Relative Factor Prices?
AU - Saad-Lessler, Joelle
N1 - Publisher Copyright:
© 2005 De Gruyter. All rights reserved.
PY - 2005
Y1 - 2005
N2 - This paper examines whether local relative factor supplies affect local relative factor prices across US states. Using data on relative wages and relative labor supplies across the US, I find that state specific relative labor supplies significantly impact state specific relative wages across the US. Moreover, in an effort to reconcile my finding with that of Hanson and Slaughter (2000), I rerun their model and I prove that their interpretation is incorrect, and that in fact, differences in relative labor supplies across states determine relative wages and industry production techniques. These findings suggest that relative FPE does not hold across US states. In addition, the findings imply that immigration shocks to US states have a significant effect on relative wages, holding all else equal, as long as the immigrant inflows significantly impact states' relative labor supplies.
AB - This paper examines whether local relative factor supplies affect local relative factor prices across US states. Using data on relative wages and relative labor supplies across the US, I find that state specific relative labor supplies significantly impact state specific relative wages across the US. Moreover, in an effort to reconcile my finding with that of Hanson and Slaughter (2000), I rerun their model and I prove that their interpretation is incorrect, and that in fact, differences in relative labor supplies across states determine relative wages and industry production techniques. These findings suggest that relative FPE does not hold across US states. In addition, the findings imply that immigration shocks to US states have a significant effect on relative wages, holding all else equal, as long as the immigrant inflows significantly impact states' relative labor supplies.
KW - Immigration
KW - Relative Factor Price Equalization
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U2 - 10.1515/1538-0653.1222
DO - 10.1515/1538-0653.1222
M3 - Article
AN - SCOPUS:80052953920
VL - 5
JO - B.E. Journal of Economic Analysis and Policy
JF - B.E. Journal of Economic Analysis and Policy
IS - 1
M1 - 19
ER -