A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
Factor mobility, the elasticity of substitution and interregional wage differentials
Abstract The analysis of non-neutral technical change has emphasized the element of factor intensity while ignoring the impact of changes in the elasticity of factor substitution on interregional wage differentials. This paper provides a formalized treatment of changes in the elasticity of factor substitution on interregional wage-rate differentials in the case where labour mobility is present. The paper demonstrates that changes in this element of non-neutral technical change (unlike changes in the factor intensity element) will have differing impacts on regional wage-rates depending on the existing labour-capital ratio in the region. The paper concludes by relating changes in factor intensity to the elasticity of factor substitution to demonstrate the interaction of both elements on non-neutral technical change on regional wage rates.
Factor mobility, the elasticity of substitution and interregional wage differentials
Abstract The analysis of non-neutral technical change has emphasized the element of factor intensity while ignoring the impact of changes in the elasticity of factor substitution on interregional wage differentials. This paper provides a formalized treatment of changes in the elasticity of factor substitution on interregional wage-rate differentials in the case where labour mobility is present. The paper demonstrates that changes in this element of non-neutral technical change (unlike changes in the factor intensity element) will have differing impacts on regional wage-rates depending on the existing labour-capital ratio in the region. The paper concludes by relating changes in factor intensity to the elasticity of factor substitution to demonstrate the interaction of both elements on non-neutral technical change on regional wage rates.
Factor mobility, the elasticity of substitution and interregional wage differentials
Drugge, Sten E. (author)
1985
Article (Journal)
English
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