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Regional differences in labor demand in the United States
The Review of Regional Studies
|January 1, 1989
Summary
Regional manufacturing labor demand elasticity varies significantly across the United States. Using national estimates can lead to errors when assessing regional economic responses to wage and output changes.
Area of Science:
- Economics
- Labor Economics
- Regional Economics
Background:
- Understanding labor demand elasticity is crucial for economic policy.
- Previous studies often used national averages, potentially overlooking regional variations.
Purpose of the Study:
- To estimate the elasticity of labor demand by region for the U.S. manufacturing sector.
- To analyze interregional differences in labor demand elasticity.
Main Methods:
- Developed a theoretical framework for labor demand analysis.
- Constructed a model to assess interregional differences in elasticity.
Main Results:
- Significant regional differences were found in substitution and output elasticities.
- Total elasticity of labor demand also varied significantly across regions.
Conclusions:
- National labor demand elasticities are insufficient for accurate regional analysis.
- Policy implications require region-specific elasticity estimates for manufacturing labor.