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Abstract:

cover
CEP Discussion Paper
The Growth of Extended 'Entry Tournaments' and the Decline of Institutionalised Occupational Labour Markets in Britain
David Marsden June 2010
Paper No' CEPDP0989:
Full Paper (pdf)

JEL Classification: J31; J44


Tags: wage level and structure; wage differentials by skill; training; professional labor markets and occupations

In recent years, British labour markets have been characterised by a decline of institutional regulation of entry routes into many occupations and internal labour markets. This paper examines this change by comparing occupational labour markets for selected occupations in which institutional regulation has remained largely intact with those in which entry has become more fluid. It argues that in the latter case, structured entry paths, which were characterised by competition at the ports of entry, have given way to extended entry tournaments in which competition is spread over a much longer time period. Using data from the New Earnings Survey panel for 1975-2001, it relates the comparatively greater growth in earnings inequality in these occupations to the emergence of extended entry tournaments. As pay at the top has risen, greater competition for entry at the bottom has held down pay and depressed conditions. It argues that many of the aspirant members of these occupations compete for entry for too long, and then become trapped as it is too late to change occupation.