1. Because of the small number of southern and western cities in the sample, it was not possible to estimate separate labor supply elasticities for each of these regions.
2. The strong positive correlation between raw materials expenditures and labor demand indicates that the potential endogeneity bias noted earlier is not, in fact, particularly severe. The availability of alternative local sources of labor appears to have been a particularly important influence on labor supply. Although LFORCE is highly correlated with city size (as measured by the number of gainfully employed workers in all occupations), substituting that variable for LFORCE would alter the estimated coefficient values considerably, eliminating all the positive wage elasticities in Table 2.
3. For simultaneous equation systems, R 2 may not be an appropriate measure of goodnesss of fit. A more reliable indication of the model's accuracy is the fit of the reduced form equations that it implies. For the wage equation, R 2 values range from about 0.2 to 0.6, suggesting that the model does indeed account for a considerable fraction of intercity wage variation.
4. Skilled metaiworkers were employed in railroad repair shops and agricultural implements manufacturing as well as in foundry and machine shops. Building trades workers—especially carpenters, painters, and plumbers—were often employed in manufacturing establishments.
5. Evidence on railroad rates is from Rosenbloom, “One Market or Many?” p. 121.