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Fear, Unemployment and Pay Flexibility

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  • Blanchflower, David G

Abstract

The paper uses newly available cross-section data to study wage determination in the United Kingdom in the 1980s. The main results are as follows: (1) fear of unemployment substantially depresses pay; (2) there is some evidence of a wage ratchet whereby rates of pay are more flexible upwards than downwards; (3) the unemployment elasticity of pay averages -0.1; and (4) wages are much more flexible in nonunion workplaces than they are in union workplaces. Copyright 1991 by Royal Economic Society.

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  • Blanchflower, David G, 1991. "Fear, Unemployment and Pay Flexibility," Economic Journal, Royal Economic Society, vol. 101(406), pages 483-496, May.
    • Handle: RePEc:ecj:econjl:v:101:y:1991:i:406:p:483-96
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