 The Structure of Wages in What Should be a Competitive Labour MarketStephen Machin and Alan Manning CEP Discussion Papers from Centre for Economic Performance, LSE Abstract: This paper examines the structure of wages in a very specific labour market, for care assistants in residential homes for the elderly on England's "sunshine coast". This sector corresponds closely to economists' notion of what should be a competitive labour market as: (i) there are a large number of small firms undertaking a very homogeneous activity in concentrated geographical areas; and (ii) the workers they employ are not unionized, nor are they covered by any minimum wage legislation so that there are effectively no external constraints on the wage-setting process. We find that the structure of wages does not, in important respects, resemble what we would expect in a competitive labour market. We find there is a small amount of wage dispersion within firms and a correspondingly large amount between firms. And, the wage dispersion that is present does not seem to be closely related to the productivity related characteristics of workers. We propose a test of the hypothesis that unobserved labour quality can explain our findings and reject it. The paper concludes with a discussion of other possible explanations of the patterns in our data. Keywords: Wage Dispersion; Competitive Model (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0532 Access Statistics for this paper More papers in CEP Discussion Papers from Centre for Economic Performance, LSE |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.