Title: Wage Shocks and North American Labor-Market Integration
Notes: Develops 3 sector model of international labor markets and bases empirical model from it. Sees lagged wage in the US affecting labor demand in US. Begins with a linear labor demand equation and suppy equations for Mexico.Solves labor market equilibrium such that Mexican wages are based on lagged American wages. Using the final difference equilibrium equation they test two parameter estimates to check on hypotheses that American and US wages respond to same shocks and that they are converging.
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