This paper analyzes 1954-1987 state manufacturing employment growth in 19two-digit industries. Markets were found to be the strongest influence in 18 industries. Labor was the second strongest, followed by a threshold variable. Weaker influences were resources, taxes, and amenities. Regional values for the market, labor, and threshold variables corresponded well with regional employment change in the Manufacturing Belt and all other regions of the US.
The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
The late 1960s saw transformational changes in economic relations between the United States and Canada. These were partly driven by the election of new leadership in both countries, and partly by the increasing political voice of Quebec within Canada. The border state of New York was uniquely positioned to experience economic consequences as successive trade agreements took hold. Yet both nations, especially Canada, first had to address long-standing economic concerns and traditions that had historically created major impediments to the concept of a more open trade and investment climate. Northern New York, in particular, found itself to be one of the chief beneficiaries, as comprehensive trade agreements were eventually passed in 1988, 1994, and 2020. This occurred despite the fact that this relatively isolated region, although very close to the United States' historical manufacturing belt, had always been considered somewhat unsuitable for economic development.
Changes in two important location factors, markets and labor, are investigated for convergence and their relationship to the regional growth of manufacturing. Analysis of the spatial composition of labor suggests that the Manufacturing Belt has experienced skilled-labor-augmenting technical progress to a greater extent than other regions, especially the Southeast. Though wage rates continue to diverge in the Manufacturing Belt, biased technical change and improvement in markets may help the region maintain a residual hegemony. However, the central states may also compete, possibly forming a new manufacturing belt in the U.S.
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