Relative wage variation and industry location

Andrew Bernard, Stephen Redding, Peter Schott and Helen Simpson

No W03/17, IFS Working Papers from Institute for Fiscal Studies

Abstract: Relative wages vary considerably across regions of the United Kingdom, with skill-abundant regions exhibiting lower skill premia than skill-scarce regions. This paper shows that the location of economic activity is correlated with the variation in relative wages. U.K. regions with low skill premia produce different sets of manufacturing industries than regions with high skill premia. Relative wages are also linked to subsequent economic development: over time, increases in the employment share of skill-intensive industries are greater in regions with lower initial skill premia. Both results suggest firms adjust production across and within regions in response to relative wage differences.

Keywords: Deindustrialization; Relative Factor Prices; Diversification Cones (search for similar items in EconPapers)
JEL-codes: C14 F11 F14 (search for similar items in EconPapers)
Pages: 26 pp
Date: 2003-09-02
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Relative Wage Variation and Industry Location (2004)
Working Paper: Relative Wage Variation and Industry Location (2004)
Working Paper: Relative wage variation and industry location (2004)
Working Paper: Relative Wage Variation and Industry Location (2003)
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