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Regional Wage Determination in Great Britain

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  • Richard Jackman
  • S Savouri

Abstract

This 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.

Suggested Citation

  • Richard Jackman & S Savouri, 1991. "Regional Wage Determination in Great Britain," CEP Discussion Papers dp0047, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0047
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    Cited by:

    1. McCormick, Barry, 1997. "Regional unemployment and labour mobility in the UK," European Economic Review, Elsevier, vol. 41(3-5), pages 581-589, April.
    2. Floro Ernesto Caroleo, 2000. "Le politiche per l'occupazione in Europa: una tassonomia istituzionale," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2000(71).
    3. Bell, Brian & Nickell, Stephen & Quintini, Glenda, 2002. "Wage equations, wage curves and all that," Labour Economics, Elsevier, vol. 9(3), pages 341-360, July.
    4. Yves Zenou & Claude Jessua, 1996. "Différences de salaires et taux de chômage entre régions," Revue Économique, Programme National Persée, vol. 47(3), pages 643-654.
    5. Marco Manacorda & Barbara Petrongolo, 1998. "Regional Imbalances and Aggregate Performance in a Leading Sector Model of the Labour Market: An analysis of Italian data 1977-1991," CEP Discussion Papers dp0402, Centre for Economic Performance, LSE.

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