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Relative Wage Variation and Industry Location in the United Kingdom

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  • Andrew B. Bernard
  • Stephen J. Redding
  • Peter K. Schott
  • Helen Simpson

Abstract

This paper shows that both relative wages and industry structure vary considerably across regions of the United Kingdom. In accordance with the neoclassical model of trade, regions abundant in a factor (i) exhibit lower relative prices of that factor than regions scarce in the factor, and (ii) tend to specialize in a mix of industries intensive in the use of the factor. We show that this specialization leads UK regions to be asymmetrically exposed to external macroeconomic or international trade shocks.

Suggested Citation

  • Andrew B. Bernard & Stephen J. Redding & Peter K. Schott & Helen Simpson, 2008. "Relative Wage Variation and Industry Location in the United Kingdom," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(4), pages 431-459, August.
    • Handle: RePEc:bla:obuest:v:70:y:2008:i:4:p:431-459
    DOI: 10.1111/j.1468-0084.2008.00510.x
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    References listed on IDEAS

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    Cited by:

    1. Cinzia Rienzo, 2017. "Real wages, wage inequality and the regional cost-of-living in the UK," Empirical Economics, Springer, vol. 52(4), pages 1309-1335, June.
    2. Neary, J. Peter & Tharakan, Joe, 2012. "International trade with endogenous mode of competition in general equilibrium," Journal of International Economics, Elsevier, vol. 86(1), pages 118-132.
    3. Rotunno, Lorenzo & Wood, Adrian, 2020. "Wage inequality and skill supplies in a globalised world," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 529-547.
    4. Kiyota, Kozo, 2012. "A many-cone world?," Journal of International Economics, Elsevier, vol. 86(2), pages 345-354.
    5. Allan Webster, 2014. "Wage Differentials and Their Determinants in US Tourism and Tourism-Associated Industries," Tourism Economics, , vol. 20(4), pages 695-725, August.
    6. Kozo Kiyota & Yoshinori Kurokawa, 2022. "Factor intensity reversals redux: Feenstra is right!," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 885-914, September.
    7. Noel Gaston & Douglas R. Nelson, 2013. "Bridging Trade Theory And Labour Econometrics: The Effects Of International Migration," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 98-139, February.
    8. Lorenzo Rotunno & Adrian Wood, 2015. "Wages and endowments in a globalised world," Economics Papers 2015-W11, Economics Group, Nuffield College, University of Oxford.
    9. Bakker, Jan David, 2018. "International trade and regional inequality," CEPREMAP Working Papers (Docweb) 1806, CEPREMAP.
    10. Yuting Li & Karsten Mau & Mingzhi Xu, 2023. "Rising Wages and Intra-Country Industry Relocation: Evidence from China," Open Economies Review, Springer, vol. 34(3), pages 579-615, July.

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