U.S. Interregional Trade and Migration

This paper explores the theoretical and empirical implications of national output maximization on the real as well as relative wages between regions within the same national economy. It is shown here that the maximization postulate yields the equalization of both the real wage rate and the relative wages between regions, which in turn implies a determinate pattern of labor migration that is similar to the pattern of an exchange of labor services through interregional commodity trade which embodies these services. An empirical investigation into the U.S. southern region’s migration and interregional commodity trade finds evidence that is broadly consistent with the implications deduced from the initial assumptions made in the paper