The long-run determinants of UK wages, 1860-2004

Jennifer Castle and David Hendry

Journal of Macroeconomics, 2009, vol. 31, issue 1, 5-28

Abstract: As it is almost 50 years since the Phillips curve, we analyze an historical series on UK wages and their determinants [see Phillips, A.W.H., 1958. The relation between unemployment and the rate of change of money wage rates in the United Kingdom, 1861-1957. Economica, 25, 283-299]. Huge changes have occurred over this long-run, so congruence is hard to establish: real wages have risen more than 6 fold, and nominal 500 times; laws, technology, wealth distribution, and social structure are unrecognizably different from 1860. We investigate: wage rates and weekly earnings; real versus nominal wages; breaks over 1860-2004; non-linearities, including Phillips' non-linear response to unemployment; 'trade union power' and unemployment benefits; and measures of excess demand, where workers react more to inflation when it rises.

Keywords: Nominal; wages; Real; wages; UK; historical; data; Structural; breaks; Non-linear; modelling (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (25)

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Working Paper: The Long-Run Determinants of UK Wages, 1860-2004 (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:31:y:2009:i:1:p:5-28

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