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|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.|
|Citation:||Bernard, Andrew B, Redding, Stephen J, Schott, Peter K. (2013). Testing for Factor Price Equality with Unobserved Differences in Factor Quality or Productivity. American Economic Journal: Microeconomics, 5 (2), 135 - 163. doi:10.1257/mic.5.2.135|
|Pages:||135 - 163|
|Type of Material:||Journal Article|
|Journal/Proceeding Title:||American Economic Journal: Microeconomics|
|Version:||Final published version. Article is made available in OAR by the publisher's permission or policy.|
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