Testing for Factor Price Equality with Unobserved Differences in Factor Quality or Productivity

B-Tier
Journal: American Economic Journal: Microeconomics
Year: 2013
Volume: 5
Issue: 2
Pages: 135-63

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

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. (JEL J31, J61, R23)

Technical Details

RePEc Handle
repec:aea:aejmic:v:5:y:2013:i:2:p:135-63
Journal Field
General
Author Count
3
Added to Database
2026-01-24