Factor price equality and the economies of the United States. Unpublished manuscript

We develop a methodology for identifying departures from relative factor price equal-ity across regions that is valid under general assumptions about production, markets and factors. Application of this methodology to the United States reveals substantial and in-creasing deviations in relative skilled wages across 181 labor markets in both 1972 and 1992. We show that these deviations vary systematically with labor markets ’ industry structure both in cross section and over time