Title

Labor Market Shifts and the Price Puzzle Revisited

Author(s)

Alan B. Krueger Alan Krueger (Princeton University and NBER)

Abstract

This paper examines the relationship between price growth and skill intensity across 150 manufacturing industries between 1989 and 1995. There are two main findings. First, wage growth and intermediate goods price increases are passed through to final product prices roughly in proportion to their factor shares. Second, product prices have grown relatively less in sectors that more intensively utilize less-skilled labor. The latter finding is consistent with the Stolper-Samuelson theory of expanded trade with countries that are abundant in less-skilled workers, as well as with some models of technological change.

Creation Date

1997-01

Section URL ID

IRS

Paper Number

375

URL

https://dataspace.princeton.edu/bitstream/88435/dsp01bc386j21k/1/375.pdf

File Function

Jel

E47

Keyword(s)

wages, prices, Stolper-Samuelson

Suppress

false

Series

1