Economic Review

Is the South rebelling again—this time against one of the tenets of economic theory? Neoclassical economic theory predicts that wage differentials between regions will disappear with time as workers move from low-wage areas to high-wage areas. However, in the seventies people tended to migrate southward, even though the South is usually thought to be a low-wage region.

In his essay. "Equalizing Regional Differences in Wages: A Study of Wages and Migration in the South and Other Regions," William E. Cullison offers a simple resolution to this paradox. By adjusting for the cost of living and by comparing similar workers in similar jobs, Cullison demonstrates that real wages are actually higher in the South than in most regions. This result may be a surprise to those who had attributed population inflows to a superior "quality of life" in the South.