تنظیم بازار کار در اقتصاد آزاد : شواهد از ایالات متحده آمریکا

In this paper we analyze whether regional economic integration across US states conditions local labor-market adjustment. We examine the mechanisms through which states absorb changes in labor supplies and whether industry production techniques are similar across states. There are two main findings. Firstly, states absorb changes in employment primarily through changes in production techniques that are common across states and through changes in the output of traded goods, with the former mechanism playing the larger role. In contrast, state-specific changes in production techniques, which are one indication of state-specific changes in relative factor prices, account for relatively little factor absorption. Secondly, industry production techniques are very similar across states, especially for neighboring states and states with similar relative labor supplies. Both sets of results are consistent with productivity-adjusted FPE across either large states or groupings of related states.

Recent literature on US labor markets identifies two important changes in national labor supplies, rising educational attainment of the labor force (Johnson, 1997) and rising immigration of individuals with low education levels relative to US natives (Borjas, 1994). Both of these labor-supply shifts have varied across regions. For instance, immigration ‘gateway’ states, such as California, have attracted a large share of new immigrants, and the increase in the relative supply of more-educated workers appears to have been strongest in the Northeast. How do regions absorb differential changes in relative labor supplies? We delineate four adjustment mechanisms: changes in regional relative factor prices, interregional migration of labor and/or capital, changes in the regional output mix, and changes in underlying production technology. While the first mechanism may occur in either closed or open economies, the other three depend on regional openness to factor, trade, or technology flows. In this paper, we examine the mechanisms through which US states absorb changes in relative labor supplies, with an emphasis on how economic openness conditions regional labor-market adjustment. Research on regional labor-supply shocks focuses almost exclusively on closed-economy settings. An important strand of this literature assesses the impact of immigration on native wages in US regions.1 The standard approach is to regress the change in native wages on the change in the stock of immigrants across US metropolitan areas. Most studies find that immigration has a small negative impact on local native wages. Adjustment mechanisms besides wage changes are ignored, except in a small literature on whether native migration responds to immigrant inflows. Borjas et al. (1997) find that immigrant inflows to a region contribute to native outmigration, while Card (1997) finds that they do not. To our knowledge, no study has examined the role of the third adjustment mechanism, changes in regional output mix, in regional absorption of labor-supply changes. By the logic of the Rybczynski Theorem (1955), a region may absorb a factor-supply shock without factor-price changes by shifting production towards sectors that employ relatively intensively factors whose supplies are expanding. Openness to trade is essential for this mechanism to work, as it implies that changes in regional outputs are absorbed by changes in regional exports and imports. There is a large literature on the fourth adjustment mechanism, technological change, but most of this research focuses on whether national shifts in production technology have been biased towards skilled workers and thus may have contributed to national increases in the relative demand for and wages of skilled labor (Katz and Murphy, 1992, Berman et al., 1994 and Autor et al., 1998). We know of no work on the impact of such skill-biased technical change (SBTC) on regional labor markets. For a single region, national SBTC may either offset or exacerbate raw regional labor-supply changes. To understand how US states absorb differential labor-supply shocks, we perform two empirical exercises. Both use a new data set we construct on real state value added by industry and state labor employment by industry for four education categories: high-school dropouts, high-school graduates, those with some college, and college graduates and beyond. The data cover 14 large US states and 40 sectors, spanning all civilian industries, in 1980 and 1990. The first exercise is to decompose changes in state employment by education category into changes in output of traded and nontraded goods, national changes in industry production techniques, and state-specific changes in industry production techniques. Changes in traded-goods output capture the contribution of output-mix changes to factor absorption; changes in national production techniques capture the contribution of national SBTC and other national shocks to factor absorption; and state-specific changes in production techniques capture the contribution of state-specific changes in relative factor prices to factor absorption. To preview our findings, state-specific changes in production techniques contribute little to factor absorption. This suggests that states adjust to labor-supply shocks more through open-economy mechanisms than through state-specific changes in relative factor prices. The second exercise is to compare industry production techniques across states. Equality of state production techniques is consistent with regional factor-price equalization (FPE). To be more precise, since we allow for factor-specific, industry-neutral productivity differences across states, equality of production techniques is consistent with FPE in productivity equivalent units. With such productivity-adjusted FPE, related states experience common relative-wage responses to small factor-supply shocks in any one state. To preview our findings, production techniques are very similar across large US states, especially for neighboring states or states with similar relative labor supplies, which is consistent with productivity-adjusted FPE. This suggests that regional openness to flows of factors, goods, and technology may be sufficient to ensure that state-specific factor-supply shocks tend to trigger common state relative-wage responses. It is important to stress that productivity-adjusted FPE does not imply equal wages, in either nominal or real terms, across states. Indeed, there is abundant evidence that nominal wages differ across regions of the United States and that these differences persist over time (Montgomery, 1991, Bernard and Jensen, 1999 and Bernard et al., 2000). Given this, the strong prior of most researchers might be that production techniques would differ across states. This makes our finding that production techniques are very similar across states all the more surprising. The combination of common production techniques and unequal wages suggests that state wage differences may be due to neutral differences in state factor productivity. This paper relates to two bodies of literature. The first is that on the wage impacts of immigration. Our findings help explain why immigration has small wage effects: open-economy adjustment mechanisms suppress region-specific wage adjustment to region-specific labor-supply shocks. The second body of literature is empirical tests of Heckscher–Ohlin (HO) trade theory. Harrigan, 1995 and Harrigan, 1997 and Bernstein and Weinstein (1998) examine whether national outputs vary systematically with national factor endowments, as predicted by the HO model. Davis et al. (1997), Davis and Weinstein (1998), and Maskus and Webster (1999) test for FPE as a means of testing the HO model indirectly. In this paper we extend this methodology to decompose how regions absorb factor-supply changes and to develop an alternative test of FPE. The rest of the paper is as follows. In Section 2, we use the HO trade model to motivate the empirical analysis. In Section 3, we examine changes in state labor supplies from 1980 to 1990 and present decompositions of state employment changes. In Section 4, we test for regional FPE by comparing state-industry production techniques. In Section 5, we offer concluding remarks.

In this paper we analyze whether regional economic integration across US states conditions local labor-market adjustment. We examine the mechanisms through which states absorb changes in labor supplies and whether industry production techniques are similar across states. There are two main findings. Firstly, states absorb changes in employment primarily through changes in production techniques that are common across all states and through changes in the output of traded goods, with the former mechanism playing the larger role. In contrast, state-specific changes in production techniques, which are one indication of state-specific changes in relative factor prices, account for relatively little factor absorption. Secondly, industry production techniques are very similar across states, especially for neighboring states and states with similar relative labor supplies. Both findings are consistent with productivity-adjusted FPE across states. FPE implies that states experience similar relative-wage responses to sufficiently small factor-supply shocks specific to a single state. This could account for why existing studies find little impact of immigration on US regional wages. Factor, trade, and technology flows across regions, which support FPE, may dampen region-specific wage adjustments. We close with three suggestions for future research. Firstly, we did not examine the national wage implications of regional factor-supply shocks, e.g., immigration. This clearly deserves greater attention. Secondly, we did not focus on the adjustment mechanism of cross-state factor flows. Future work might try to estimate the relative contribution of interregional migration, trade, and technology flows to regional labor-market integration. Thirdly, we have not analyzed regional variation in nominal wages or tried to account for sources of inter-state productivity differences. A natural extension of our work would be to compare interstate differences in industry production techniques with interstate differences in nominal wages.