Regional Wage Determination in Great Britain
AbstractThis paper investigates the determinants of regional wages in Britain using annual data from the New Earnings Survey over the period 1974-1989. Separate wage equations are estimated for male and female workers, for manuals and non-manuals and for manufacturing industry as against non-manufacturing. The main conclusions are that local laboour market conditions (as measured by the regional unemployment rate) have a significant impact on wages only in the case of manual men. In the case of these workers we find that the relationship between wages and unemployment is best fitted by a double logarithmic form, which in turn implies that a 10 per cent reduction in the variance of male annual unemployment rates across regions could be associated with a 5 per cent fall in the average unemployment rate of this group. Differences in the wage rates of non-manual men and women across regions appears to have more to do with differences in the cost-of-living (and especially house prices) suggesting that the labour market for these groups is national rather than local in character.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0047.
Date of creation: Jul 1991
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