IDEAS home Printed from https://ideas.repec.org/a/bla/presci/v86y2007i1p77-100.html
   My bibliography  Save this article

Industry localisation and earnings inequality: Evidence from U.S. manufacturing

Author

Listed:
  • Christopher H. Wheeler

Abstract

. While the productivity gains associated with the geographic concentration of industry (i.e., localisation) are by now well‐documented, little work has considered how those gains are distributed across individual workers. This article offers evidence on the connection between total employment and the relative wage earnings of high‐ and low‐skill workers (i.e., inequality) within two‐digit manufacturing industries across the states, and a collection of metropolitan areas in the U.S. between 1970 and 1990. Using measures of overall, between‐education‐group and residual inequality, I find that wage dispersion falls significantly as industry employment expands.

Suggested Citation

  • Christopher H. Wheeler, 2007. "Industry localisation and earnings inequality: Evidence from U.S. manufacturing," Papers in Regional Science, Wiley Blackwell, vol. 86(1), pages 77-100, March.
    • Handle: RePEc:bla:presci:v:86:y:2007:i:1:p:77-100
    DOI: 10.1111/j.1435-5957.2007.00107.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1435-5957.2007.00107.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1435-5957.2007.00107.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nicole M. Fortin & Thomas Lemieux, 1997. "Institutional Changes and Rising Wage Inequality: Is There a Linkage?," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 75-96, Spring.
    2. Andrew B. Bernard & J. Bradford Jensen, 2000. "Understanding Increasing and Decreasing Wage Inequality," NBER Chapters, in: The Impact of International Trade on Wages, pages 227-268, National Bureau of Economic Research, Inc.
    3. Guy Dumais & Glenn Ellison & Edward L. Glaeser, 2002. "Geographic Concentration As A Dynamic Process," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 193-204, May.
    4. Gary Solon & Robert Barsky & Jonathan A. Parker, 1994. "Measuring the Cyclicality of Real Wages: How Important is Composition Bias?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(1), pages 1-25.
    5. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, November.
    6. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
    7. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 285-325, April.
    8. Rebecca M. Blank & Alan S. Blinder, 1985. "Macroeconomics, Income Distribution, and Poverty," NBER Working Papers 1567, National Bureau of Economic Research, Inc.
    9. repec:hoo:wpaper:e-95-4 is not listed on IDEAS
    10. Jin Huem Park, 1994. "Estimation of Sheepskin Effects and Returns to Schooling Using he Old and the New CPS Measures of Educational Attainment," Working Papers 717, Princeton University, Department of Economics, Industrial Relations Section..
    11. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    12. Haskel, Jonathan, 1996. "Small Firms, Contracting-out, Computers and Wage Inequality: Evidence from UK Manufacturing," CEPR Discussion Papers 1490, C.E.P.R. Discussion Papers.
    13. Barron, John M & Bishop, John & Dunkelberg, William C, 1985. "Employer Search: The Interviewing and Hiring of New Employees," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 43-52, February.
    14. Ronald L. Moomaw, 1981. "Productivity and City Size: A Critique of the Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(4), pages 675-688.
    15. Carlino, Gerald A. & Voith, Richard, 1992. "Accounting for differences in aggregate state productivity," Regional Science and Urban Economics, Elsevier, vol. 22(4), pages 597-617, November.
    16. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    17. Leo Sveikauskas, 1975. "The Productivity of Cities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 89(3), pages 393-413.
    18. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    19. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April.
    20. Kenneth R. Troske, 1999. "Evidence On The Employer Size-Wage Premium From Worker-Establishment Matched Data," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 15-26, February.
    21. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 117-143, August.
    22. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
    23. Feenstra, Robert C. (ed.), 2000. "The Impact of International Trade on Wages," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226239637.
    24. Jin Huem Park, 1994. "Estimation of Sheepskin Effects and Returns to Schooling Using he Old and the New CPS Measures of Educational Attainment," Working Papers 717, Princeton University, Department of Economics, Industrial Relations Section..
    25. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    26. Gordon B. Dahl, 2002. "Mobility and the Return to Education: Testing a Roy Model with Multiple Markets," Econometrica, Econometric Society, vol. 70(6), pages 2367-2420, November.
    27. Robert H. Topel, 1997. "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 55-74, Spring.
    28. repec:adr:anecst:y:1996:i:41-42:p:14 is not listed on IDEAS
    29. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1169-1213.
    30. Daron Acemoglu & Joshua Angrist, 1999. "How Large are the Social Returns to Education? Evidence from Compulsory Schooling Laws," NBER Working Papers 7444, National Bureau of Economic Research, Inc.
    31. Jonathan Heskel, 1999. "Small Firms, Contracting‐out, Computers and Wage Inequality: Evidence from UK Manufacturing," Economica, London School of Economics and Political Science, vol. 66(261), pages 1-21, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Neil Lee & Andrés Rodríguez-Pose, 2013. "Innovation and spatial inequality in Europe and USA," Journal of Economic Geography, Oxford University Press, vol. 13(1), pages 1-22, January.
    2. Alessia Matano & Paolo Naticchioni, 2009. "Wage distribution and the spatial sorting of workers and firms," Working Papers - Dipartimento di Economia 8-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2009.
    3. Neil Lee & Paul Sissons & Katy Jones, 2016. "The Geography of Wage Inequality in British Cities," Regional Studies, Taylor & Francis Journals, vol. 50(10), pages 1714-1727, October.
    4. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    5. Churen Sun & Zhihao Yu & Tao Zhang, 2012. "Agglomeration, Productivity, and Firms¡® Exports: Evidence from Chinese Firm-level Data," ERSA conference papers ersa12p882, European Regional Science Association.
    6. Thomas W. Volscho & Andrew S. Fullerton, 2005. "Metropolitan Earnings Inequality: Union and Government‐Sector Employment Effects," Social Science Quarterly, Southwestern Social Science Association, vol. 86(s1), pages 1324-1337, December.
    7. Sun, Churen & Yu, Zhihao & Zhang, Tao, 2012. "Agglomeration and Trade with Heterogeneous Firms," MPRA Paper 49001, University Library of Munich, Germany, revised 17 Aug 2013.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wheeler, Christopher H., 2006. "Productivity and the geographic concentration of industry: The role of plant scale," Regional Science and Urban Economics, Elsevier, vol. 36(3), pages 313-330, May.
    2. Christopher H. Wheeler, 2005. "Cities, Skills, and Inequality," Growth and Change, Wiley Blackwell, vol. 36(3), pages 329-353, June.
    3. Gordon H. Hanson, 2000. "Scale Economies and the Geographic Concentration of Industry," NBER Working Papers 8013, National Bureau of Economic Research, Inc.
    4. Ciccone, Antonio & Peri, Giovanni, 2002. "Identifying Human Capital Externalities: Theory with an Application to US Cities," CEPR Discussion Papers 3350, C.E.P.R. Discussion Papers.
    5. Wheeler, Christopher H., 2004. "On the distributional aspects of urban growth," Journal of Urban Economics, Elsevier, vol. 55(2), pages 371-397, March.
    6. Moretti, Enrico, 2011. "Local Labor Markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 14, pages 1237-1313, Elsevier.
    7. Christopher Wheeler, 2007. "Do localization economies derive from human capital externalities?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 41(1), pages 31-50, March.
    8. Barrios, Salvador & Bertinelli, Luisito & Eric, Strobl & Antonio Carlos, Teixeira, 2003. "Agglomeration Economies and the Location of Industries: A comparison of Three small European Countries," MPRA Paper 5704, University Library of Munich, Germany.
    9. Todd M. Gabe, 2004. "Establishment Growth in Small Cities and Towns," International Regional Science Review, , vol. 27(2), pages 164-186, April.
    10. Wheeler, Christopher H., 2008. "Worker turnover, industry localization, and producer size," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 322-334, May.
    11. Antonio Ciccone & Giovanni Peri, 2006. "Identifying Human-Capital Externalities: Theory with Applications," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(2), pages 381-412.
    12. Elsie L. Echeverri-Carroll & Sofia G. Ayala, 2011. "Urban Wages: Does City Size Matter?," Urban Studies, Urban Studies Journal Limited, vol. 48(2), pages 253-271, February.
    13. Hsiao-Lan Liu & Hsin-Yi Lin & Shin-Kun Peng, 2010. "The spillover effects of R&D on manufacturing industry in Taiwan’s metropolitan areas," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(3), pages 519-546, December.
    14. Christopher H. Wheeler, 2009. "Technology and industrial agglomeration: Evidence from computer usage," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 43-62, March.
    15. J. Vernon Henderson, 2003. "Urbanization and Economic Development," Annals of Economics and Finance, Society for AEF, vol. 4(2), pages 275-341, November.
    16. Baldwin, John R. Beckstead, Desmond Brown, W. Mark Rigby, David, 2007. "Urban Economies and Productivity," Economic Analysis (EA) Research Paper Series 2007045e, Statistics Canada, Analytical Studies Branch.
    17. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 377-393, May.
    18. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    19. Faberman, R. Jason & Freedman, Matthew, 2016. "The urban density premium across establishments," Journal of Urban Economics, Elsevier, vol. 93(C), pages 71-84.
    20. Henderson, J. Vernon, 2003. "Marshall's scale economies," Journal of Urban Economics, Elsevier, vol. 53(1), pages 1-28, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:presci:v:86:y:2007:i:1:p:77-100. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.