sahling1983

Prévia do material em texto

Regional Wage Differentials: Has the South Risen Again?
Author(s): Leonard G. Sahling and Sharon P. Smith
Source: The Review of Economics and Statistics, Vol. 65, No. 1 (Feb., 1983), pp. 131-135
Published by: The MIT Press
Stable URL: http://www.jstor.org/stable/1924417 .
Accessed: 25/06/2014 03:48
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp
 .
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.
 .
The MIT Press is collaborating with JSTOR to digitize, preserve and extend access to The Review of
Economics and Statistics.
http://www.jstor.org 
This content downloaded from 185.2.32.134 on Wed, 25 Jun 2014 03:48:41 AM
All use subject to JSTOR Terms and Conditions
http://www.jstor.org/action/showPublisher?publisherCode=mitpress
http://www.jstor.org/stable/1924417?origin=JSTOR-pdf
http://www.jstor.org/page/info/about/policies/terms.jsp
http://www.jstor.org/page/info/about/policies/terms.jsp
NOTES 
REGIONAL WAGE DIFFERENTIALS: HAS THE SOUTH RISEN AGAIN? 
Leonard G. Sahling and Sharon P. Smith* 
Since the beginning of this century, wages in the 
South had remained not only lower than in the North, 
but also substantially lower than in every other region 
of the country. Early studies attributed the regional 
differentials in money wages to variations in the qual- 
ity of the labor force, in the industrial or occupational 
mixes of employment, in the severity of discrimination 
by race or sex, and in the spatial distribution of 
amenities and disamenities. Yet, even after controlling 
for these factors, wages were still observed to be lower 
in the South than elsewhere in the country.' 
On the basis of more recent evidence, however, the 
problem seems to be not with the structure of the labor 
market, but rather with how the market's performance 
has been gauged. Recognizing that what matters to 
workers is their real wage instead of the dollar amount, 
Coelho and Ghali (1971, 1973) analyzed the nominal 
and real wages of factory workers in 1963 for selected 
cities in the North and the South. They found that, 
after controlling for regional differences in the cost of 
living as well as in the industrial mix, the resulting 
estimates of real wages turned out to be the same in 
both regions. In a later study, Bellante (1979) updated 
and corroborated these findings. Using wage data from 
the 1970 Census, he showed that workers with com- 
parable attributes earned equal real wages in the North 
and South throughout the 1960s. 
The purpose of this study is to determine to what 
extent real wages varied across the country during the 
1970s. The statistical procedure we employ is more 
rigorous than those used in past studies. Our study 
focuses on the regional wage differentials in the largest 
Standard Metropolitan Statistical Areas (SMSAs) of 
the country. The wage data are from the Current Popu- 
lation Surveys of May 1973 and May 1978 which cover 
individual male and female workers from across the 
country (rather than the industry aggregates of much 
of the prior work). We find first that during the 1970s 
real wages did tend to vary across the country for 
comparable workers. Second, for males the long- 
standing Northeast/South wage differential has not 
only disappeared in money terms; it has actually re- 
versed! 
Measuring Regional Wage Differentials 
The model used in this study is derived from the 
formulations of Mincer (1974) and Becker and Chis- 
wick (1966) in which an individual's wages are a func- 
tion of investments in human capital, principally for- 
mal schooling and on-the-job training. The education 
and experience variables are specified as quadratics to 
permit the rate of return to each to vary with level of 
investment. An interaction term between education 
and experience allows the rate of return to on-the-job 
training to differ with the level of schooling. Because 
information on the actual years of work experience is 
unavailable in the data used for this study, we use the 
conventional proxy measure of age minus years of 
schooling minus six. The basic model for the wage 
structure is 
ln(Wi/Pi) = Bo + B1Si + B2S,2 + B3EiSi 
+ B4E2 + ui (1) 
where (Wi/Pi) is the real wage of the ith individual, 
adjusted for regional differences in the cost of living, Si 
is the years of schooling, Ei is the years of work ex- 
perience, and ui is the random error term which allows 
for the effects of natural ability and luck. A similar 
treatment in which wages are specified in money terms 
yields an examination of regional differentials in 
money wages as well. 
To account for the influence of other individual and 
labor market characteristics we include dummy vari- 
ables for the following socioeconomic categories: mar- 
ital status; race; Spanish origin; veteran status (for 
males); regular part-time worker; dual job holder; 
union membership; occupation; and industry. Individ- 
ual equations are estimated for money and for real 
wages for each sex by ordinary least squares. 
Received for publication February 25, 1981. Revision ac- 
cepted for publication July 7, 1982. 
* Federal Reserve Bank of New York and American Tele- 
phone and Telegraph Company, respectively. 
The authors wish to thank C. Cirrincione, A. Gambale, 
M. Goldstein, and E. Greene for expert computational assis- 
tance. The authors would also like to thank D. Bellante, 
W. Cullison, V. K. Smith, M. Willis, A. Yezer, and two 
anonymous referees for their comments on an earlier draft of 
this paper. Special thanks are due to 0. Ashenfelter and H. 
Cline for their help in obtaining the 1973 Current Population 
Survey data. The views expressed in this paper are our own 
and do not necessarily reflect those of the Federal Reserve 
Bank of New York, the Federal Reserve System, or the Bell 
System. The responsibility for errors lies solely with the 
authors. 
I See, for example, the empirical analyses of Fuchs (1967), 
Galloway (1963), Hanushek (1973), Kiefer and Smith (1977), 
and Scully (1969). 
[ 131 ] 
This content downloaded from 185.2.32.134 on Wed, 25 Jun 2014 03:48:41 AM
All use subject to JSTOR Terms and Conditions
http://www.jstor.org/page/info/about/policies/terms.jsp
132 THE REVIEW OF ECONOMICS AND STATISTICS 
At issue here is whether wages vary among compar- 
able workers in different regions of the country in both 
money and real terms. However, data for price in- 
dexes for rural areas are not available. Therefore, we 
focus on regional wage differentials among residents of 
large cities. 
Statistical tests have shown that the wage structures 
(that is, the estimated equations) are significantly dif- 
ferent across these five separate regions (as defined 
below).2 Therefore, in examining wage differences 
among comparable workers in the regions, we must 
allow for two principal sources of regional wage varia- 
tion. The first is that wages may vary across regions 
because the characteristics of the work force in each 
region differ. Such wage differentials cannot properly 
be considered 'regional." The second source of wage 
variation is if the returns to an individual's characteris- 
tics differ across regions. This can be viewed as a 
"'regional' differential since it measures the wage dif- 
ferences that would persist between comparable 
workers in different regions. 
The technique for decomposing the gross propor- 
tional wage differential between regions (expressed in 
logarithms) follows that of Oaxaca (1973) and Smith 
(1977). If, for example, the North Central/South 
money wage differential for males in 1973 is being 
analyzed, these components are estimated under two 
alternativeassumptions: (1) if there were no differ- 
ences in wage structures across these regions, the es- 
timated North Central equation would apply to both, 
or (2) if there were no differences in wage structures 
across these regions, the estimated Southern equation 
would apply to both. Under assumption (1), the por- 
tion of the gross differential due to differences in 
characteristics between the regions is measured by 
weighting the difference between the mean values of 
the independent variables for the two regions by the 
coefficients estimated for the North Central. The part 
of the gross differential due to region is measured by 
weighting the difference between the estimated 
coefficients for the two regions by the mean values of 
the independent variables for the South. This "net" 
wage differential is a residual and thus includes the 
effects of omitted variables. Under assumption (2), the 
weights are the southern coefficients and the means of 
the independent variables for the North Central. It is 
assumed that the range of estimates for the net differ- 
ential includes the true value one would obtain if one 
knew the wage structure that would prevail for all 
areas in the absence of regional differences. 
Wage and Sociodemographic Data 
All of the data for this study except for the cost of 
living were obtained from the Current Population Sur- 
veys taken in May 1973 and May 1978. From each 
survey, a subsample was drawn of those male and 
female workers who had worked ten or more hours per 
week for pay3 and who lived in one of twenty-nine of 
the fifty largest SMSAs (by the 1970 rankings).4 A 
peculiarity of these data is that they indicate only 
where an individual lives, and not where he or she 
works. Thus it is assumed that each person in the 
subsample both lives and works in the same SMSA. 
Farmers and private household workers were ex- 
cluded from the subsamples because much of their 
remuneration is income-in-kind that goes unreported, 
and comparisons involving only wages would have 
been misleading. 
Net of all adjustments, the subsamples used in this 
study covered 13,502 workers from the May 1973 sur- 
vey and 13,147 workers from the May 1978 survey. 
The five regions are defined as: 
(1) The New York metropolitan area, which con- 
sists of New York City, certain neighboring 
New York State urban areas, as well as certain 
major urban areas in northeastern New Jersey.5 
2 A generalized Chow test confirms that at the 1% level the 
equations estimated for each wage type (money or real) for 
each sex are significantly different across the five regions in 
both 1973 and 1978. For the specification of this test statistic, 
see Mandansky (1976), pp. 227-228. 
3 Individuals who reported that they usually work less than 
ten hours per week were excluded because previous research 
with Current Population Survey data had indicated that there 
was a strong possibility of error in recording usual hours of 
work for this group. 
4 Arranged by size, these twenty-nine SMSAs are: New 
York, New York; Los Angeles-Long Beach, California; 
Chicago, Illinois; Philadelphia, Pennsylvania; Detroit, Michi- 
gan; San Francisco-Oakland, California; Washington, 
D.C.-Maryland-Virginia; Boston, Massachusetts; Nassau- 
Suffolk, New York; Pittsburgh, Pennsylvania; St. Louis, 
Missouri-Illinois; Baltimore, Maryland; Cleveland, Ohio; 
Houston, Texas; Newark, New Jersey; Minneapolis-St. Paul, 
Minnesota; Dallas, Texas; Seattle-Everett, Washington; 
Milwaukee, Wisconsin; Atlanta, Georgia; Cincinnati, Ohio; 
Paterson-Clifton-Passaic, New Jersey; San Diego, California; 
Buffalo, New York; Kansas City, Missouri-Kansas; Denver, 
Colorado; Indianapolis, Indiana; Fort Worth, Texas; and 
Gary-Hammond-East Chicago, Indiana. 
It should be noted that, in assigning cost-of-living informa- 
tion to a particular area, several SMSAs were sometimes 
combined. In particular, one cost-of-living index was as- 
signed to the whole group of New York, New York; Nas- 
sau-Suffolk, New York; Newark, New Jersey; and Pater- 
son-Clifton-Passaic, New Jersey (i.e., the "New York re- 
gion"); one to Chicago, Illinois and Gary-Hammond-East 
Chicago, Indiana; and one to Dallas, Texas and Fort Worth, 
Texas. 
5 Recent research on trends in regional economic develop- 
ment has suggested that the performance of the New York 
metropolitan area has been quite different from that of the 
rest of the Northeast. See, for example, Mieszkowski and 
Straszheim (1979), pp. 8-10. Therefore, it is appropriate that 
an examination of regional wage differentials distinguish 
wage patterns in this area from the rest of the Northeast. 
This content downloaded from 185.2.32.134 on Wed, 25 Jun 2014 03:48:41 AM
All use subject to JSTOR Terms and Conditions
http://www.jstor.org/page/info/about/policies/terms.jsp
NOTES 133 
(2) The rest of the Census Northeast, which con- 
sists of urban New England and the heavily ur- 
banized areas of "upstate" New York, 
Pennsylvania, and southern New Jersey. 
(3) The North Central, which encompasses the 
most urbanized areas of the Mideast. 
(4) The South, which includes the heavily ur- 
banized areas of the South Atlantic states to as 
far west as Texas. 
(5) The West, which consists of the large cities in 
both the Mountain and Pacific divisions. 
Residents of smaller SMSAs or of rural areas were 
excluded because of the lack of appropriate cost-of-liv- 
ing clata. Given these samples, hourly money wages 
were estimated with information on usual weekly earn- 
ings and usual weekly hours, as reported by the work- 
ers themselves. Thus, the money wage rate includes 
the effects of premium pay for usual overtime 
worked.6 
Cost-of-Living Data 
The regional cost-of-living data pertain to two points 
in time-Autumn 1972 and Autumn 1977. These are 
annual data compiled by the Bureau of Labor Statistics 
and published in its pamphlet, Urban Family Bludgets 
a1d Comparative Indexes bfor Selected Urban Arceas. 
Corresponding to each SMSA are three alternative 
indices of the cost of living for a low, intermediate, and 
high budget for an urban family with four members. 
For this study, the cost-of-living index was defined to 
correspond to the intermediate budget, adjusted to 
exclude state and local taxes.7 
Empirical Results 
For most jobs, the nation is composed of a patch- 
work of overlapping local labor markets. Yet, as long 
as these markets succeed in disseminating information 
about economic conditions in neighboring markets as 
well as in themselves, the real wage should tend to be 
the same everywhere. Money wage differentials may 
persist, however, even when local labor markets are 
working efficiently if there are differences in cost of 
living across areas. There are three basic questions to 
be answered here: Do wages vary among comparable 
workers in different parts of the country? If they do 
vary, are the differences in money terms only or in real 
terms as well? And have there been changes in these 
regional wage relationships during the 1970s? 
In order to answer these questions, we take two 
separate readings of the net regional wage differentials 
(in both money and real terms) among urban work- 
ers-one for 1973 and one for 1978. Because, as noted 
above, the wage structures are significantly different 
across regions, separate regressions are estimated for 
males and for females in each of the five regions-the 
New York region, the rest of the Northeast, the North 
Central, the South, and the West-with the dependent 
variable alternatively specified as the money and the 
real wage. This allows the rate of return to each of the 
factors defining the wage structure to vary across the 
regions. Thus, for example, the union/nonunion wage 
differential is allowed to vary across the major areas of 
the country. It should be noted that the "fit" of our 
estimated human-capital wage model, as measured by 
the R', is very good for cross-sectional data, especially 
the equations for maleworkers. Space limitations pre- 
clude discussion of regression results for all of these 
wage structures. Instead, attention is focused on pair- 
wise comparisons of comparable workers in different 
regions in 1973 and 1978.8 
These comparisons are based on the decomposition 
technique described in the previous section. The esti- 
mates that are presented here, however, represent a 
simplification and a summarization of the results ob- 
tained under the two weighting schemes. Thus, for the 
net differential in each of these pairwise comparisons, 
we obtain a single estimate which is the mid-point of 
the estimates made under the two weighting schemes. 
We then take the antilogarithm of this estimate so that 
it may be presented in proportional form with the 
southern wage in the numerator for ease of interpreta- 
tion. 
Net Regional Wage Patterns 
An examination of the estimated net wage differen- 
tials indicates that substantial wage differentials per- 
sist among comparable workers in both money and 
real terms. (See table 1.) With the exception of com- 
parisons with that part of the urban Northeast apart 
from the New York area, money wage net differentials 
seem to be in broad agreement with historically ob- 
served patterns: namely, that money wages are lower 
6 There is one unavoidable problem in the use of earnings 
data from the Current Population Survey: Each worker's 
earnings are reported in such a way that the weekly total 
cannot exceed $999; workers who earned in excess of this are 
included in the survey, but with a reported income of $999 per 
week. It is not anticipated that this problem will have much of 
an effect on the estimates presented here, however, because 
the number of observations that fall into this category for 
1973 or 1978 is so small. 
7Federal, state, and local taxes were excluded from the 
index because of the difficulties associated with measuring 
the specific amounts of the taxes paid by each individual in 
the data samples, and with measuring the quantities of public 
goods "bought" with these tax revenues. 
8 Full regression and decomposition results are available 
on request from the authors. An examination of these regres- 
sion results and use of t-tests reveals which of the coefficients 
differ between regions and the magnitude and significance of 
the individual differences. 
This content downloaded from 185.2.32.134 on Wed, 25 Jun 2014 03:48:41 AM
All use subject to JSTOR Terms and Conditions
http://www.jstor.org/page/info/about/policies/terms.jsp
134 THE REVIEW OF ECONOMICS AND STATISTICS 
in the urban South than for comparable workers in 
these other regions.9 The largest estimated differential 
is with women in the New York area in 1973: 13%. As 
we have already observed, however, such money 
wage differentials are to be expected so long as area 
differences in the cost of living persist. 
It is the observation of substantial regional wage 
differentials among comparable workers in real terms 
that offers a surprising contrast to the results of previ- 
ous research. It appears that comparable workers 
across the country receive substantially different 
wages and that these differences are not largely at- 
tributable to variations in the cost of living. Thus, our 
estimates suggest a very different regional wage pat- 
tern than that implied by the earlier research. Indeed, 
these results indicate that throughout the 1970s money 
wages in the areas outside the South were insufficient 
to compensate workers for the relatively higher costs 
of living they experienced. Consequently, as early as 
1973 wages of both men and women were as much as 
10% higher in real terms in the urban South than for 
comparable workers in that part of the urban North- 
east apart from the New York area. In fact, wages 
were lower in this part of the Northeast than anywhere 
else in urban America. 
Moreover, during the years between 1973 and 1978, 
a major change in regional wage patterns appears to 
have occurred. In brief, with one exception, the aver- 
age wage position of both males and females in the 
South improved in both money and real terms relative 
to comparable workers in every other region in urban 
America.'0 Thus, in real terms, wages in the urban 
South were as much as 18% higher than those of com- 
parable males in the New York area and 16% higher 
than those of comparable females in the rest of the 
Northeast. 
Indeed, these estimates indicate that by 1978 male 
workers in the urban South earned more in money 
terms than comparable workers throughout the North- 
east. Evidently, then, the Northeast/South wage dif- 
ferential for males has not just disappeared in money 
terms; it has actually reversed! The Northeast/South 
money wage differential for females appears to be ap- 
proaching this point as well. 
Summary and Conclusion 
The principal finding of this study is that real wages 
have in fact varied substantially and systematically 
TABLE 1.-ESTIMATED NET REGIONAL WAGE 
DIFFERENTIALS, 1973 AND 1978 
The Ratio of Nominal Wages in 
the South to the Wages of 
Comparable Workers in 
Rest 
New of 
York North- North 
Region east Central West 
Males 1973 0.92 1.02 0.95 0.97 
1978 1.02 1.05 0.99 0.97 
Females 1973 0.87 1.02 0.98 0.94 
1978 0.98 1.07 1.02 0.98 
The Ratio of Real Wages in the 
South to the Wages of 
Comparable Workers in 
Rest 
New of 
York North- North 
Region east Central West 
Males 1973 1.09 1.10 1.01 1.04 
1978 1.18 1.14 1.03 1.02 
Females 1973 1.03 1.10 1.04 1.01 
1978 1.13 1.16 1.06 1.03 
across the country during the 1970s. In particular, 
contrary to traditional beliefs, we have observed that 
the real wages of both male and female workers are 
sharply lower throughout the Northeast than for com- 
parable urban workers in the South. Moreover, these 
real differentials have widened between 1973 and 1978. 
However, there is not necessarily an inconsistency 
with earlier research for, as Bellante has observed: 
It may well be that real earnings have always been sig- 
nificantly lower in the South and have risen to rough 
equality with the North only since the late 1960s. For 
that matter, real wages in the South may prove to have 
risen above Northern levels by the time of the upcoming 
1980 Census, as some parties to the Sunbelt-Snowbelt 
controversy seem to fear."1 
More startling, however, are our results with respect 
to regional differentials in money wages. In 1978, 
money wages for males were lower throughout the 
Northeast than for comparable workers in the South. 
For females, money wages remained slightly higher in 
the New York area than for comparable workers in the 
South but were lower in the rest of the Northeast than 
in the South. These money wage differentials repre- 
sent a reversal from observations that have been made 
since at least the turn of the century and suggest that 
from the worker's perspective the Northeast has be- 
come a low-wage area. 
9 One other exception to this generalization is that money 
wages are higher for women in the urban South in 1978 than 
for comparable women in the North Central region. 
10 The one exception is that in comparisons of males in the 
South relative to the West, their money wage position re- 
mained the same while their real wage position deteriorated 
slightly. I Bellante (1979), p. 174. 
This content downloaded from 185.2.32.134 on Wed, 25 Jun 2014 03:48:41 AM
All use subject to JSTOR Terms and Conditions
http://www.jstor.org/page/info/about/policies/terms.jsp
NOTES 135 
REFERENCES 
Becker, Gary S., and Barry R. Chiswick, "Education and the 
Distribution of Earnings," American Economic Re- 
view, Papers and Proceedings 56 (May 1966), 358- 
369. 
Bellante, Don, "The North-South Differential and the Migra- 
tion of Heterogeneous Labor," American Economic 
Review 69 (Mar. 1979), 166-175. 
Coelho, Philip R. P., and Moheb A. Ghali, "The End of the 
North-South Wage Differential," American Eco- 
nomic Review 61 (Dec. 1971) 932-937., "The End of the North-South Wage Differential: 
Reply," American Economic Review 63 (Sept. 1973), 
757-762. 
Fuchs, Victor, Differentials in Hourly Earnings by Region 
and City Size, 1959, National Bureau of Economic 
Research, Occasional Paper 101 (New York: Colum- 
bia University Press, 1967). 
Gallaway, Lowell E., "The North-South Wage Differen- 
tial," this REVIEW 45 (Aug. 1963), 264-272. 
Hanushek, Eric A., "Regional Differences in the Structure of 
Earnings," this REVIEW 55 (May 1973), 204-213. 
Kiefer, Nicholas M., and Sharon P. Smith, "Union Impact 
and Wage Discrimination by Region," Journal of 
Human Resources 12 (Fall 1977), 521-534. 
Mandansky, Albert, Foundations of Econometrics (Amster- 
dam: North-Holland Publishing Company, 1976). 
Mieszkowski, Peter, and Mahlon Straszheim (eds.), Current 
Issues in Urban Economics (Baltimore: The Johns 
Hopkins University Press, 1979). 
Mincer, Jacob, Schooling, Experience, and Earnings (New 
York: National Bureau of Economic Research, dis- 
tributed by Columbia University Press, 1974). 
Oaxaca, Ronald, "Male-Female Wage Differentials in Urban 
Labor Markets," International Economic Review 14 
(Oct. 1973), 693-709. 
Scully, Gerald W., "Interstate Wage Differentials: A Cross 
Sectional Analysis," American Economic Review 59 
(Dec. 1969), 757-773. 
Smith, Sharon P., Equal Pay in the Public Sector: Fact or 
Fantasy, Research Report Series No. 122 (Princeton, 
N.J.: Industrial Relations Section, Princeton Univer- 
sity, 1977). 
U. S. Department of Labor, Bureau of Labor Statistics, 
Autumn 1972 Urban Family Budgets and Comparative 
Indexes for Selected Urban Areas, 1973. 
, Autumn 1977 Urban Family Budgets and Compara- 
tive Indexes for Selected Urban Areas, 1978. 
A NOTE ON KUZNETS' U 
Michael Braulke* 
I. Introduction 
It is well over a quarter of a century ago that Kuz- 
nets (1955) formulated what has since then been re- 
ferred to as his celebrated U-hypothesis. In its 
classical version, the hypothesis maintains that given a 
two-sector economy with not too distinct degrees 
of inequality within sectors but different sectoral mean 
incomes, a continuous transfer of population from one 
sector to another will initially increase aggregate in- 
equality and only later decrease. Kuznets demon- 
strated this by calculating the aggregate Lorenz curve 
for a hypothetical economy with simple sector-specific 
distributions; Robinson (1976) proved the U-shape to 
be a general phenomenon if the variance serves as the 
measure of inequality; and Knight (1976) showed the 
same to hold true for the Gini coefficient using, how- 
ever, the extreme assumption of perfect equality 
within sectors. 
Opinions differ as to what the classical U-hypothesis 
actually means. For some, the U-shape is merely a 
technical property of certain inequality measures. 
Knight, for instance, questioned whether one should 
be concerned at all about changes in measured aggre- 
gate inequality if they reflect essentially a transfer of 
individuals from a poor sector to a richer one. For 
others, the U-hypothesis, along with the observation 
that economic development is typically accompanied 
by increasing urbanization, has condensed to a simple 
theory that may help to explain the empirical evidence. 
According to this evidence1 economic development 
appears to be associated for a longer part of the pro- 
cess with a worsening income distribution. We shall 
consider the U-hypothesis here in this latter interpreta- 
tion as a theory about the nexus between development 
and inequality, and we intend to investigate how realis- 
tic its underlying assumptions are. 
Identifying the development process with increasing 
urbanization, as the classical U-hypothesis does, ap- 
pears to be entirely unproblematic. There is a very 
close correlation between urbanization and GDP per 
capita. Consequently, the degree of urbanization can 
be considered to be as good an indicator of a country's 
Received for publication January 1, 1981. Revision ac- 
cepted for publication May 25, 1982. 
* Universitaet Konstanz. 
' See, e.g., the work of Oshima (1962), Adelman and Mor- 
ris (1973), Paukert (1973) or Della Valle and Oguchi (1976). 
This content downloaded from 185.2.32.134 on Wed, 25 Jun 2014 03:48:41 AM
All use subject to JSTOR Terms and Conditions
http://www.jstor.org/page/info/about/policies/terms.jsp
	Article Contents
	p. 131
	p. 132
	p. 133
	p. 134
	p. 135
	Issue Table of Contents
	The Review of Economics and Statistics, Vol. 65, No. 1 (Feb., 1983), pp. 1-182
	Volume Information
	Front Matter
	Data Mining [pp. 1 - 12]
	Optimal Price Forecasting Using Survey Data [pp. 13 - 21]
	Structure-Profit Relationship at the Line of Business and Industry Level [pp. 22 - 31]
	Potential Benefits of Rail Mergers: An Econometric Analysis of Network Effects on Service Quality [pp. 32 - 40]
	Modeling Location and Production: An Application to U.S. Fully-Integrated Steel Plants [pp. 41 - 50]
	Testing Efficiency Hypotheses in Joint Production: A Parametric Approach [pp. 51 - 58]
	Incentive Payments in Time-of-Day Electricity Pricing Experiments: The Arizona Experience [pp. 59 - 65]
	Net Migration, Endogenous Incomes and the Speed of Adjustment to the North-South Differential [pp. 66 - 75]
	Industry Migration and Growth in the South [pp. 76 - 86]
	Secular and Cyclical Responses of U.S. Trade to Income: An Evaluation of Traditional Models [pp. 87 - 95]
	Determinants of International Trade Flows [pp. 96 - 104]
	Food Preferences and Nutrition in Rural Bangladesh [pp. 105 - 114]
	Nested Tests of Alternative Term-Structure Theories [pp. 115 - 123]
	Symmetry Restrictions in a System of Financial Asset Demands: Theoretical and Empirical Results [pp. 124 - 130]
	Notes
	Regional Wage Differentials: Has the South Risen Again? [pp. 131 - 135]
	A Note on Kuznets' U [pp. 135 - 139]
	Unemployment Insurance Incentives and Unemployment Duration Distributions [pp. 139 - 143]
	Has the Rate of Investment Fallen? [pp. 144 - 149]
	Production in a Service Industry Using Customer Inputs: A Stochastic Model [pp. 149 - 153]
	A Further Note on Factor Substitution and Efficiency [pp. 153 - 155]
	The Determinants of Co-Authorship: An Analysis of the Economics Literature [pp. 155 - 160]
	Box-Cox Estimation with Standard Econometric Problems [pp. 160 - 164]
	Consistent Estimation of Certain Parameters in the Unobservable Variable Model When There is Specification Error [pp. 164 - 167]
	On Group Effects and Errors in Variables in Aggregation [pp. 168 - 173]
	An Empirical Study of Politico-Economic Interaction in the United States: A Comment [pp. 173 - 178]
	An Empirical Study of Politico-Economic Interaction in the United States: A Reply [pp. 178 - 182]
	Back Matter