THE SUBSTITUTION OF LABOR, SKILLS, AND CAPITAL IN U.S. MANUFACTURING TRADE: IMPLICATIONS FOR EMPLOYMENT AND INCOMES

Keith Maskus and Alok Bohara

Papers in Regional Science, 1985, vol. 57, issue 1, 47-62

Abstract: ABSTRACT This paper considers the structure of internal input demand functions across a comprehensive set of U.S. manufacturing industries in 1958, 1964, 1970, and 1976. The inputs considered are unskilled labor, skilled labor, and gross physical capital. Input substitution is examined using the flexible translogarithmic cost function. The emphasis is on differences in substitution possibilities between importables and exportables, both nationally and on a regional basis. The importance of this emphasis is that various policy initiatives could result in different employment and income distribution effects, depending on differential input substitution in traded goods and across regions. The results suggest that such differences exist and should, therefore, be of concern to policy makers.

Date: 1985
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https://doi.org/10.1111/j.1435-5597.1985.tb00857.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:presci:v:57:y:1985:i:1:p:47-62

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