IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/3030.html

Employment, Wages, and Unionism in a Model of the Aggregate Labor Market in Britain

Author

Listed:
  • John H. Pencavel

Abstract

Two propositions figure prominently in explanations for Britain's comparatively low growth in employment: first, the wage-setting mechanism is insufficiently responsive to the growth of unemployment and, second, there exists a well-defined negative causal relationship from wages to employment with the features of a conventional labor demand function. Using aggregate annual observations from 1953 to 1979, find the evidence for a conventional labor demand curve to be fragile and find little support for the notion that trade union objectives are unaffected by unemployment as some versions of the "insider-outsider" hypothesis would maintain. In general, the empirical results in this paper emphasize that confident inferences about Britain's employment record cannot be drawn from aggregate data.

Suggested Citation

  • John H. Pencavel, 1989. "Employment, Wages, and Unionism in a Model of the Aggregate Labor Market in Britain," NBER Working Papers 3030, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3030
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w3030.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:bla:scandj:v:87:y:1985:i:2:p:357-78 is not listed on IDEAS
    2. J. D. Sargan, 1980. "A Model of Wage-Price Inflation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 97-112.
    3. Carruth, Alan A & Oswald, Andrew J, 1987. "On Union Preferences and Labour Market Models: Insiders and Outsi ders," Economic Journal, Royal Economic Society, vol. 97(386), pages 431-445, June.
    4. Andrews, Martyn J, 1987. "The Aggregate Labour Market: An Empirical Investigation into Market-Clearing for the UK," Economic Journal, Royal Economic Society, vol. 97(385), pages 157-176, March.
    5. repec:sae:niesru:v:115:y::i:1:p:52-63 is not listed on IDEAS
    6. repec:bla:econom:v:53:y:1986:i:210(s):p:s121-69 is not listed on IDEAS
    7. Grubb, David B. & Jackman, Richard & Layard, Richard, 1983. "Wage rigidity and unemployment in OECD countries," European Economic Review, Elsevier, vol. 21(1-2), pages 11-39.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Springer, K.A., 1989. "Wage rigidity and the persistence of unemployment," Serie Research Memoranda 0041, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    2. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Kees Folmer, 2009. "Why do macro wage elasticities diverge? A meta analysis," CPB Discussion Paper 122, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Muysken, J. & Zwick, Th., 1996. "Insider power breeds human capitalists," Research Memorandum 030, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    5. H. Naci Mocan & Deborah Viola, 1997. "The Determinants of Child Care Workers' Wages and Compensation: Sectoral Differences, Human Capital, Race, Insiders and Outsiders," NBER Working Papers 6328, National Bureau of Economic Research, Inc.
    6. David Metcalf, 1993. "Transformation of British Industrial Relations? Institutions, Conduct and Outcomes 1980-1990," CEP Discussion Papers dp0151, Centre for Economic Performance, LSE.
    7. Laurence Ball, 1994. "What Determines the Sacrifice Ratio?," NBER Chapters, in: Monetary Policy, pages 155-193, National Bureau of Economic Research, Inc.
    8. Muysken Joan & Zwick Thomas, 1996. "Insider power breeds human capitalists," Research Memorandum 017, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    9. Möller, Joachim, 1988. "Identifying the causes of unemployment: Estimation and control of a small macroeconomic model," Discussion Papers, Series I 236, University of Konstanz, Department of Economics.
    10. Lavan Mahadeva & Katerina Smidkova, 2004. "Modelling transmission mechanism of monetary policy in the Czech Republic," Macroeconomics 0402032, University Library of Munich, Germany.
    11. Marit Gjelsvik & Ragnar Nymoen & Victoria Sparrman, 2020. "Cointegration and Structure in Norwegian Wage–Price Dynamics," Econometrics, MDPI, vol. 8(3), pages 1-15, July.
    12. Christopher Bowdler, 2003. "Openness and the Output-Inflation Tradeoff," Economics Papers 2003-W04, Economics Group, Nuffield College, University of Oxford.
    13. Graafland, J.J., 1991. "From Phillips curve to wage curve," MPRA Paper 21077, University Library of Munich, Germany.
    14. John C. P. McCallum, 1986. "Two Cheers for the Anti-Inflation Board," Canadian Public Policy, University of Toronto Press, vol. 12(1), pages 133-147, March.
    15. Paul Flatau, 2003. "Are Nominal Wages Downwardly Rigid? New Australian Evidence on an Old Quarrel," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(1), pages 1-4, March.
    16. JOHN CREEDY & IAN M. McDONALD, 1991. "Models of Trade Union Behaviour: A Synthesis," The Economic Record, The Economic Society of Australia, vol. 67(4), pages 346-359, December.
    17. Aurélien Goutsmedt & Matthieu Renault & Francesco Sergi, 2021. "European Economics and the Early Years of the International Seminar on Macroeconomics," Revue d'économie politique, Dalloz, vol. 131(4), pages 693-722.
    18. Andy Snell & Jonathan P. Thomas, 2010. "Labor Contracts, Equal Treatment, and Wage-Unemployment Dynamics," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(3), pages 98-127, July.
    19. Thomas Jordan, 1997. "Disinflation costs, accelerating inflation gains, and central bank independence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(1), pages 1-21, March.
    20. Beissinger, Thomas & Baudy, Philipp, 2015. "The impact of temporary agency work on trade union wage setting: A theoretical analysis," Hohenheim Discussion Papers in Business, Economics and Social Sciences 01-2015, University of Hohenheim, Faculty of Business, Economics and Social Sciences.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3030. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.