Labour frictions in interwar Britain: industrial reshuffling and the origin of mass unemployment

Ivan Luzardo-Luna

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This article estimates the matching function of the British labour market for the period of 1921-1934. Changes in matching efficiency can explain both employment resilience during the Great Depression and the high structural unemployment throughout the interwar period. Early in the 1920s, matching efficiency improved due to the development of the retail industry. However, the econometric results show a structural break in March 1927, related to a major industrial reshuffling that reduced the demand for workers in staple industries. Since these industries were geographically concentrated, there was an increase in the average distance between the unemployed and vacancies, and matching efficiency declined.

JEL-codes: N34 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2020-05-12
New Economics Papers: this item is included in nep-his
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Citations: View citations in EconPapers (1)

Published in European Review of Economic History, 12, May, 2020, 24(2), pp. 243 - 263. ISSN: 1361-4916

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