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Wage Disparities in Britain: People or Place?

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  • Steve Gibbons
  • Henry G. Overman
  • Panu Pelkonen

Abstract

This paper investigates wage disparities across sub-national labour markets in Britain using a newly available microdata set. The findings show that wage disparity across areas is very persistent over time. While area effects play a role in this wage disparity, most of it is due to individual characteristics (sorting). Area effects contribute a very small percentage to the overall variation of wages and so are not very important for understanding overall levels of wage disparity. Specifically, in our preferred specification area effects explain less than 1% of overall wage variation. This share has remained roughly constant over the period 1998- 2008.

Suggested Citation

  • Steve Gibbons & Henry G. Overman & Panu Pelkonen, 2010. "Wage Disparities in Britain: People or Place?," SERC Discussion Papers 0060, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:sercdp:0060
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      by Tyler Cowen in Marginal Revolution on 2011-03-29 20:40:57

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    More about this item

    Keywords

    wage; disparities; labour;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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