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Domestic wage determination: Regional Spillovers and inward investment

Author

Listed:
  • Nigel Driffield
  • Karl Talyor

Abstract

This paper evaluates the extent of inter- industry, and inter-regional wage spillovers across the UK. A large literature exists suggesting that wages elsewhere affect wage determination and levels of satisfaction, but this paper extends the analysis to examine the effects of inward investment in the process. Thus far the specific effect of foreign wages on domestic wage determination has not been evaluated. Using industry and regional level panel data for the UK the paper reports evidence that such wage spillovers do occur, and that they are more widespread for skilled, than for unskilled workers and also lower in areas of high unemployment.

Suggested Citation

  • Nigel Driffield & Karl Talyor, 2002. "Domestic wage determination: Regional Spillovers and inward investment," Discussion Papers in Economics 02/12, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:leecon:02/12
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    File URL: https://www.le.ac.uk/economics/research/RePEc/lec/leecon/econ02-12.pdf
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    References listed on IDEAS

    as
    1. Cornwell, Christopher & Schmidt, Peter & Wyhowski, Donald, 1992. "Simultaneous equations and panel data," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 151-181.
    2. Stephen Machin & John Van Reenen, 1998. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1215-1244.
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    More about this item

    Keywords

    Wage determination; regional spillovers; alternative wage;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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