Full Citation

Title: Regional Earnings Inequality and Convergence of Factor Returns: Theory and Evidence

Citation Type: Dissertation/Thesis

Publication Year: 1999

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Abstract: This thesis studies the implications of the convergence of factor returns on earnings inequality within theoretical models of trade, migration, and economic growth and development. The implications of different models are tested empirically by using U.S. census data in 1959 and 1979. As the convergence of the factor returns is related to the comparison of the real earnings of the similar workers, one has to adjust for regional cost of living differentials. Regional cost of living indices are partly determined by locally produced goods and services. Gross housing rents are used to adjust for regional cost of living differentials. About 6 to 7 percent of the non-south/south differential in average earnings can be explained by the lower cost of living in south. Studies that do not adjust for regional cost of living differentials tend to overestimate the non-south/south earnings differential. When only one type of worker is identified as an input in the production, convergence of the factor returns through trade, migration, and growth and economic development have the same implications as far as the earnings inequality and the average earnings are concerned. However, when there are more than one type of workers in the production, the implications of the convergence of the factor returns on the average earnings and the earnings inequality will be determined by the evolution of the human capital investments.

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Authors: Kurban, Haydar

Institution: University of Illinois at Chicago

Department: Economics

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Degree: Doctor of Philosophy

Publisher Location: Chicago, IL

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Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Migration and Immigration, Other

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