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A Quarterly Model of the Labour Market in Interwar Britain

Hatton, T (1987) A Quarterly Model of the Labour Market in Interwar Britain. UNSPECIFIED. CEPR Discussion Papers.

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The paper analyses the determinants of interwar unemployment using a previously unexploited quarterly data set for 1924-39. Individual equations for insured employment, insured unemployment and the nominal wage rate are estimated and tested. The results indicate that the real wage was an important determinant of employment but not of the labor force, where demographic variables and the effects of the insurance system dominate. The model of wage setting encompasses several different hypotheses concerning the operation of the labor market. Three special cases with widely differing implications for labor market adjustment are each found to be consistent with the data. The data used in this study do not allow us to distinguish between interpretations which emphasize structural unemployment, wage rigidity or benefit-induced unemployment: this helps explain why such divergent views have been maintained.

Item Type: Monograph (UNSPECIFIED)
Uncontrolled Keywords: Britain; Labour Market Adjustment; Unemployment; Wage Rigidity; Wage Setting; Wages
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 19 Jul 2012 13:11
Last Modified: 17 Aug 2017 18:09

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