A Two-Sector Analysis of the UK Labour Market

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A Two-Sector Analysis of the UK Labour Market

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Holly, Sean
Smith, Peter

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Abstract

This paper investigates why the U.K. has experienced steadily higher unemployment at cyclical peaks since 1965 using a structural model of the U.K. labor market. The mo del emphasizes the differences in experience and structure of the man ufacturing and nonmanufacturing private sectors using a bargaining ap proach to wage determination. Empirical results for the post-1965 per iod suggest that adverse supply shocks, such as tax increases, as wel l as demand deficiencies have played an important role in determinin g the increase in the level of unemployment and the degree of real wa ge stickiness, which is the corollary of this rise. Copyright 1987 by Blackwell Publishing Ltd

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Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.

Volume (Year): 49 (1987)
Issue (Month): 1 (February)
Pages: 79-102
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Handle: RePEc:bla:obuest:v:49:y:1987:i:1:p:79-102

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Steve Dowrick & Karen Mumford, 1990. "Wage Bargaining with Endogenous Profits, Overtime Working and Heterogeneous Labor," Working Papers 657, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
Other versions:
- Mumford, Karen & Dowrick, Steve, 1994. "Wage Bargaining with Endogenous Profits, Overtime Working and Heterogeneous Labor," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 329-36, May. [Downloadable!] (restricted)
Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memoranda 224, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
David G. Blanchflower & Andrew J. Oswald, 1990. "The Wage Curve," NBER Working Papers 3181, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
- Blanchflower, David G & Oswald, Andrew J, 1990. " The Wage Curve," Scandinavian Journal of Economics, Blackwell Publishing, vol. 92(2), pages 215-35.
- David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, December.
Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Discussion Papers 122, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]

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