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The UK Wage Curve: New Evidence from the British Household Panel Survey

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Bill Collier ()

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Abstract

This paper investigates the UK wage curve using longitudinal micro data drawn from the first eight waves of the British Household Panel Survey (BHPS). We estimate a fixed-effects model that controls for observed and unobserved individual-specific heterogeneity. Our results suggest that there is evidence of a negative relationship in wage-unemployment space. The estimated unemployment elasticity of pay for UK males is approximately ?0.14 and this elasticity is robust to a number of alternative specifications. There is no evidence of a significant wage curve for women. These findings are consistent with panel studies reported for other countries. They contrast with previous studies for the UK, however, in that they reject the inclusion of higher order polynomial terms for unemployment. The main findings of the paper, therefore, are that the wage-unemployment relationship is robust but not as non-linear as has been previously thought.

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Paper provided by Department of Economics, University of Kent in its series Studies in Economics with number 0010.

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Date of creation: Oct 2000
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Handle: RePEc:ukc:ukcedp:0010

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Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 764000
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Web page: http://www.ukc.ac.uk/economics/

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Related research
Keywords: Wage Structure; Wage Curve; Panel data; Unemployment; Regional Labour Markets;

Other versions of this item:

Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General

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    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," IZA Discussion Papers 1665, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. David Castro Lugo, 2006. "Curva salarial: una aplicación para el caso de México, 1993-2002," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 21(2), pages 233-273. [Downloadable!]
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