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The Substitution Of Labor, Skills, And Capital In U.S. Manufacturing Trade: Implications For Employment And Incomes

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  • Keith E. Maskus
  • Alok Bohara

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.

Suggested Citation

  • Keith E. Maskus & Alok Bohara, 1985. "The Substitution Of Labor, Skills, And Capital In U.S. Manufacturing Trade: Implications For Employment And Incomes," Papers in Regional Science, Wiley Blackwell, vol. 57(1), pages 47-62, January.
    • Handle: RePEc:bla:presci:v:57:y:1985:i:1:p:47-62
    DOI: 10.1111/j.1435-5597.1985.tb00857.x
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    Cited by:

    1. Matthew J. Slaughter, 1997. "International Trade and Labor-Demand Elasticities," NBER Working Papers 6262, National Bureau of Economic Research, Inc.
    2. Rana Hasan & Devashish Mitra & K.V. Ramaswamy, 2007. "Trade Reforms, Labor Regulations, and Labor-Demand Elasticities: Empirical Evidence from India," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 466-481, August.
    3. Roy, Jayjit & Yasar, Mahmut, 2015. "Energy efficiency and exporting: Evidence from firm-level data," Energy Economics, Elsevier, vol. 52(PA), pages 127-135.
    4. Slaughter, Matthew J., 2001. "International trade and labor-demand elasticities," Journal of International Economics, Elsevier, vol. 54(1), pages 27-56, June.

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