TRADE,GEOGRAPHY AND THE SKILL PREMIUM IN U.S. MANUFACTURING |
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| Authors: | JOHN FRANCIS YUQING ZHENG |
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| Affiliation: | Francis: Assistant Professor, Department of Economics & Finance, College of Business, Louisiana Tech University, Ruston, LA 71272. Phone 318‐257‐2917, Fax 318‐257‐4253, E‐mail francis@latech.edu |
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| Abstract: | A number of studies have suggested that countries (or regions) with access to larger markets have higher wages. In this paper, we examine whether access to larger markets affects skilled and unskilled workers differently. We develop a model relating two key measures of market size, market and supplier access, to industry value added prices. We then estimate the effects of growth in these measures on factor returns in U.S. manufacturing industries between 1984 and 1996. We find that growth in these measures can explain around 5% of the rise in the skill premium over the sample period. (JEL F12, F16, L60) |
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