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Do Skilled Labor Shortages Reduce Interregional Manufacturing Productivity?

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Abstract

The main focus of this paper is to investigate the impact of interstate variations of skilled labor shortages on manufacturing productivity for the period 1977 to l992. We conduct the analysis for a mixed set of two-digit manufacturing industries across a sample of forty-eight United States to examine the effect of skilled labor shortages on productivity among different industries. We find strong evidence that skilled labor shortages have a statistically significant negative effect on productivity growth for both durable and non-durable industry groups respectively. This is a unique and interesting finding. It suggests that if policy makers want to maintain the recovery in productivity growth, they must continue to create incentives that increase the effectiveness and training of the labor force.

Suggested Citation

  • Mullen, John K. & Williams, Martin, 1999. "Do Skilled Labor Shortages Reduce Interregional Manufacturing Productivity?," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 52(4), pages 483-499.
    • Handle: RePEc:ris:ecoint:0263
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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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