Real Wage Growth, Technical Change and Competition in the Labor Market

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Abstract
The paper measures the rate of growth of average labor cost and the real wage for the twenty U.S. two digit manufacturing industries 1948-76. It is argued that these rates of growth give interesting information which other studies on the real wage ignore. The results suggest that the gains from technical advance are shared equally across all labor markets, consistent with the competitive paradigm. A simple and appealing rationale for the observation that high growth industries show the slowest relative rate of growth of prices is also given.

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