Regional Factor Price Equality in Finland Reveals Surprising Industry Mix
The article examines how factor prices (like wages for skilled and unskilled workers) equalize between different regions in Finland. The researchers use a trade model to test if factor prices are the same across regions, even if productivity varies. They find that skilled labor is paid less in regions with more skilled workers. This study is unique because it focuses on Finland, a large but sparsely populated country with well-integrated markets. The results differ from similar studies in the U.S. and U.K. due to Finland's specific characteristics and data sources.