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Short‐ And Long‐Run Decompositions Of Uk Wage Inequality Changes

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  • Terence Huw Edwards
  • John Whalley

Abstract

This paper focuses on the decomposition of observed increases in UK wage inequality since 1979 into the component factors of competition from low‐wage imports and technological change. Building on recent work by Abrego and Whalley, we argue that the length of production run and degree of fixity of factors is crucial in such analyses. If the response of labour markets to date is a short‐run response, in which factors and output have not adjusted fully, then analysis of the causes of increased inequality is substantially altered relative to a long‐run factors mobile world.

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  • Terence Huw Edwards & John Whalley, 2007. "Short‐ And Long‐Run Decompositions Of Uk Wage Inequality Changes," Bulletin of Economic Research, Wiley Blackwell, vol. 59(1), pages 1-24, January.
    • Handle: RePEc:bla:buecrs:v:59:y:2007:i:1:p:1-24
    DOI: 10.1111/j.0307-3378.2007.00252.x
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    References listed on IDEAS

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    Cited by:

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    2. Akay, Gokhan H., 2012. "Trade and factor returns: Empirical evidence from U.S. economy," International Review of Economics & Finance, Elsevier, vol. 21(1), pages 77-86.
    3. Keshab Bhattarai, 2016. "Growth and Income Distributions in Four EU Economies," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 22(3), pages 263-277, August.
    4. Iain Fraser & Robert Waschik, 2010. "The Double Dividend Hypothesis in a CGE Model: Specific Factors and Variable Labour Supply," Working Papers 2010.02, School of Economics, La Trobe University.
    5. Gokhan Akay & Can Dogan, 2013. "The effect of labor supply changes on output: empirical evidence from US industries," Journal of Productivity Analysis, Springer, vol. 39(2), pages 123-130, April.
    6. Edwards, T. Huw & Lücke, Matthias, 2021. "Decomposing the growth of the high-skilled wage premium in an advanced economy open to trade," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 766-784.
    7. Keshab Raj BHATTARAI, 2009. "Dynamic Multi-Household General Economic Models for Policy Simulations: France, Germany, Spain and UK," EcoMod2009 21500014, EcoMod.

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