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A Two-Sector Analysis of the UK Labour Market

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  • Holly, Sean
  • Smith, Peter

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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Bibliographic Info

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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Cited by:
  1. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, January.
  2. Kees Folmer, 2009. "Why do macro wage elasticities diverge? A meta analysis," CPB Discussion Paper 122, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.

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