Unemployment, Duration and Wage Determination in the UK: Evidence from the FES 1980-86

D H Blackaby, Robin Bladen-Hovell and Elizabeth Symons

Oxford Bulletin of Economics and Statistics, 1991, vol. 53, issue 4, 377-99

Abstract: This paper presents evidence on the relationship between duration and wage determination in the United Kingdom based upon a data set obtained by combining the Family Expenditure Survey for 1980-86, supplemented with regional unemployment rates and cost of living indices. The results support the contention of R. Layard and S. J. Nickell (1986, 1987) that the long-term unemployed effectively drop out of the labor market. Recent claims that this duration effect is removed once unemployment nonlinearities are introduced are also examined but little supporting evidence is found. Instead, in certain specifications, the opposite occurs: duration effects dominate nonlinearities. Copyright 1991 by Blackwell Publishing Ltd

Date: 1991
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