Wage Inequality and Regional Labour Market Performance in the US
In the US, fluctuations in relative wages and employment across regional markets are very large. For example, during the so-called ‘Massachusetts miracle’ of the 1980s, average wages of men in New England increased by 17 percent, while wages in the ‘rustbelt’ states of the Midwest fell by about 8 percent. At the same time, annual weeks worked increased by about 4 weeks per person in New England, but fell by about 2 weeks in the Midwest. Changes such as these are apparently demand driven in the sense that wage and employment fluctuations are positively correlated over time (Juhn, Murphy and Topel, 1991).
KeywordsMigration Assimilation Resid Rosen Univer
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