Time-series and cross-section data are used to analyze the determinants of di fferences in regional earnings. The authors find that individual attr ibutes and the regional industry mix are significant factors in the e xplanation of regional earnings differentials. The unexplained residu al differential is reduced when money earnings are deflated by an app ropriate price index; the pressure of demand, as proxied by the unemp loyment rate, adversely affects earnings both over time and between r egions. Regional nonaccelerating inflation rates of unemployment are calculated from the time-series results and suggest an increased role for regional policies in national reflationary strategies. Copyright 1987 by Blackwell Publishers Ltd and The Victoria University of Manchester
