Results

Blog

LSE Politics and Policy:

The only way to substantially reduce the number of migrants crossing the Channel is through an agreement with France

Current government policy, whatever its rhetoric, is to muddle on, trying to deter crossings, trying to return migrants to safe countries but recognising that borders are inevitably porous. Muddling on is often an under-...Read more...

Blog

LSE Business Review:

Return of the guest worker: guest or servant?

Demands for temporary visas are increasing in the UK, but few are discussing the details of how such short-term visas are going to work. Alan Manning writes a nuanced account of the trade-offs involved. The worse the con...Read more...

Blog

LSE blogs:

UK labour shortages and immigration: looking at the evidence

Can the shortages of workers reported by the food and drink sector be solved by making it easier to hire migrants? How will wages in these sectors change? Is there a conflict between short- and long-term fixes? Alan Mann...Read more...

CEP discussion paper

Income and the desire to migrate

We analyse the role of household and country-level personal income in explaining both the desire to emigrate and the desired destination country. We use data from the Gallup World Poll and applications to the US Diversit...Read more...

CEP discussion paper

The measure of monopsony

There has been increasing interest in recent years in monopsony in labour market. This paper discusses how we can measure monopsony power combining insights from models based on both frictions and idiosyncrasies. It pres...Read more...

CentrePiece article

Ethnic minorities and the UK labour market

Contrary to the impression given by the Sewell Report, there has been little change in disparities in pay, employment and unemployment among different ethnic groups in the UK over the past 25 years. Indeed, as analysis o...Read more...

Blog

LSE Blogs: politics and policy:

Why the UK-India Young Professionals Scheme might end up benefitting a handful of large companies

The announcement of a new visa for young, professional Indians to work in the UK could prove popular - but an eye needs to be kept on how it ends up being used in practice, writes Alan Manning....Read more...

Blog

LSE Blogs:

Contrary to the impression given by the Sewell Report, things for ethnic minorities in the UK labour market are not getting better

Using estimates from the Labour Force Survey, Alan Manning and Rebecca Rose fill in some of the gaps of the government's Sewell Report on race and ethnic disparities. Comparing disparities in pay, employment, and unemplo...Read more...

Blog

Economics Observatory:

Ethnic minorities and the UK labour market: are things getting better?

Alan Manning and Rebecca Rose compare disparities in pay, employment and unemployment among different ethnic groups in the UK finding that there has been little change over the past 25 years. Indeed, for black, Pakistani...Read more...

CEP discussion paper

Commuting for crime

People care about crime, with the spatial distribution of both actual and perceived crime affecting the amenities from living in different areas and residential decisions. The literature finds that crime tends to happen ...Read more...

Journal article

ILR Review:

Monopsony in Labor Markets: A Review

Researchers’ interest in monopsony has increased in recent years. This article reviews the accumulating evidence that employers have considerable monopsony power. It summarizes the application of this idea to explaining ...Read more...

Journal article

Journal of Human Resources: Forthcoming

The Urban Wage Premium in Imperfect Labor Markets

Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from fierce competition in thick labour markets. We first establish that employers possess less wage-settin...Read more...

CentrePiece article

In brief... Monopsony in labour markets: what it is, why it matters

Many firms are able to exploit the fact that it is hard for workers to move from one employer to another, keeping wages lower than they would be in a competitive market. As Alan Manning explains, labour markets are becom...Read more...

Blog

LSE British Politics and Policy:

Monetary financing: why the government should not be worrying about the deficit

Alan Manning writes that government should stop worrying about the current deficit, financing it less by issuing debt though being clear that this is a temporary policy for exceptional circumstances. He explains how mone...Read more...

Submission to a parliamentary inquiry and government consultation

Channel crossings, migration and asylum-seeking routes through the EU

This inquiry will examine the reasons behind the growth in migrants crossing the English Channel in small boats. It will look at the role of criminal gangs in facilitating the growth of this form of illegal immigration a...Read more...

Blog

LSE Business Review:

Why we need to do something about the monopsony power of employers

Monopsony decreases worker mobility, keeping wages lower than they would be in a competitive market, writes Alan Manning...Read more...

CEP discussion paper

Subjective job insecurity and the rise of the precariat: evidence from the UK, Germany and the United States

There is a widespread belief that work is less secure than in the past, that an increasing share of workers are part of the ’precariat’. It has been hard to find evidence for this is objective measures of job security bu...Read more...

Blog

LSE Business Review:

UK economic problems: diagnosing is easier than coming up with solutions

With Boris Johnson’s launch of his “New Deal” and Michael Gove’s speech on “the privilege of public service”, the government has made clear its intention to press ahead with the domestic agenda of “levelling-up” and refo...Read more...

Blog

LSE British Politics and Policy:

No Recourse to Public Funds: More than a quick fix needed for immigration rules

The Prime Minister recently appeared surprised to hear that most non-EEA migrants with temporary leave to remain in the UK are not eligible to claim benefits, and hinted at a review in the light of COVID-19. Alan Manning...Read more...

Blog

LSE British Politics and Policy:

Abolishing the NHS surcharge for health and care workers is not as generous as it sounds – a pay rise is needed

The government was recently been forced to re-think its plans to continue charging workers in health and social care for using the NHS. But how many pay the surcharge and how much would it cost to abolish it? In answerin...Read more...

Blog

LSE Business Review:

How will Covid-19 shape the future economic role of the British state?

When the pandemic has passed into history, what will be its implications for the role of the state in our economy? Some think it will (or should be) the replacement of one -ism with another. But to see the issues we face...Read more...

CEP discussion paper

Monopsony and the wage effects of migration

In a generalization of the well-known “immigration surplus” result, we show immigration must always increase the average native worker’s marginal product, in any long-run constant returns economy. But in a monopsonistic ...Read more...

Journal article

Journal of Economic Perspectives:

The elusive employment effect of the minimum wage

Vacant, previously-developed land in cities can generate negative externalities on surrounding areas, and is often the target of policies to promote re-development. This paper provides estimates of the price sensitivity ...Read more...

Blog

LSE British Politics and Policy:

Residential mobility in the UK: how distance and local economic conditions drive residential choices

Monica Langella and Alan Manning find that high unemployment in an area induces people to move away, and has an even stronger effect on the attractiveness of that area to potential movers. They also find that younger and...Read more...

Journal article

Economic Journal:

Diversity and Neighbourhood Satisfaction

This article investigates the impact of ethnic diversity on individuals' satisfaction with their neighbourhoods. It uses panel data and a variety of empirical methods to control for potential endogeneity of diversity and...Read more...

CEP discussion paper

Residential mobility and unemployment in the UK

The UK has suffered from persistent spatial differences in unemployment rates for many decades. A low responsiveness of internal migration to unemployment is often argued to be an important cause of this problem. This pa...Read more...

CEP discussion paper

Commuting, migration and local joblessness

Britain suffers from persistent spatial disparities in employment rates. This paper develops an integrated framework for analyzing two forces expected to equalize economic opportunity across areas: commuting and migratio...Read more...

Journal article

American Economic Review: Insights:

Robot Arithmetic: New Technology and Wages

Existing economic models show how new technology can cause large changes in relative wages and inequality. But there are also claims, based largely on verbal expositions, that new technology can harm workers on average o...Read more...

CEP discussion paper

The urban wage premium in imperfect labour markets

Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from fierce competition in thick labour markets. We first establish that employers possess less wage-settin...Read more...

Journal article

Travail et Emploi:

Polarization(s) in Labour Markets: Synthesis and Perspectives

Polarization is now well established and documented. The increase in the share of high-wage and low-wage jobs at the expense of "intermediate" jobs has led to a polarization of jobs in the US (Autor, 2010; Autor, Dorn, 2...Read more...

Submission to a parliamentary inquiry and government consultation

Post Brexit migration inquiry

Read more...

CEP discussion paper

Diffusion of social values through the lens of US newspapers

Changing attitudes are the result of a battle for hearts and minds in which agents for and against change try to persuade others. We know very little about this process. This paper develops a methodology for measuring se...Read more...

Journal article

American Economic Review:

The persistence of local joblessness

Differences in employment-population ratios across US commuting zones have persisted for many decades. We claim these disparities represent real gaps in economic opportunity for individuals of fixed characteristics. Thes...Read more...

CentrePiece article

How 'local' are local labour markets?

If we want to create jobs in disadvantaged local areas, the idea of ‘local’ needs to be revisited. Alan Manning and Barbara Petrongolo explain the problem of thinking of geographical space as non-overlapping single labou...Read more...

Submission to a parliamentary inquiry and government consultation

Immigration and Scotland inquiry

Read more...

Journal article

Foreign Affairs:

The Truth About the Minimum Wage: Neither Job Killer Nor Cure-All

It has been more than eight years since many of the United States’ cashiers, dishwashers, janitors, lifeguards, baggage handlers, baristas, manicurists, retail employees, housekeepers, construction laborers, home health ...Read more...

Journal article

American Economic Review:

How Local Are Labor Markets? Evidence from a Spatial Job Search Model

This paper models the optimal search strategies of the unemployed across space to characterize local labor markets. Our methodology allows for linkages between numerous areas, while preserving tractability. We estimate t...Read more...

CEP discussion paper

Robot arithmetic: can new technology harm all workers or the average worker?

It is well-established that new technology can cause large changes in relative wages and inequality. But there are also claims, based largely on verbal expositions, that new technology will harm workers on average or eve...Read more...

CEP discussion paper

Diversity and neighbourhood satisfaction

This paper investigates the impact of ethnic diversity on individuals’ overall satisfaction with and other aspects of their neighbourhood. It uses panel data and a variety of empirical methods to control for potential en...Read more...

CentrePiece article

Who voted Leave?

If EU immigration had remained at its 1991 level, the Leave vote share may have been considerably lower. That is one of the conclusions of CEP research by Monica Langella and Professor Alan Manning, which explores the ef...Read more...

Blog

LSE British Politics and Policy:

Who voted Leave: the characteristics of individuals mattered, but so did those of local areas

Individual demographics had a huge effect in determining the outcome of the referendum, but the characteristics of local areas mattered as well, explain Monica Langella and Alan Manning. Immigration, the decline in manuf...Read more...

CEP discussion paper

The elusive employment effect of the minimum wage

There is a huge body of empirical research on the employment effect of the minimum wage that has failed to clearly demonstrate the negative effect that so many economists strongly believe to find. This paper reviews the ...Read more...

CEP discussion paper

Reservation wages and the wage flexibility puzzle

Wages are only mildly cyclical, implying that shocks to labour demand have a larger short-run impact on unemployment rather than wages, at odds with the quantitative predictions of the canonical search model – even if wa...Read more...

Journal article

American Economic Journal: Applied Economics:

The contribution of the minimum wage to US wage inequality over three decades: A reassessment

We reassess the effect of minimum wages on US earnings inequality using additional decades of data and an IV strategy that addresses potential biases in prior work. We find that the minimum wage reduces inequality in the...Read more...

CentrePiece article

In brief... American Idol: 65 years of admiration

Every year for over half a century, the US opinion pollsters Gallup have asked Americans to say which person they most admire. Alan Manning and Amar Shanghavi consider what their answers reveal about how public attitudes...Read more...

CEP discussion paper

The persistence of local joblessness

Local differences in US employment-population ratios and unemployment rates have persisted over many decades. Using decennial census data from 1950-2010, we investigate the reasons for this. The persistence cannot be exp...Read more...

CEP election analysis

#ElectionEconomics: The Research Evidence on Key Issues for Voters in the 2015 UK General Election

Please see the CEP #ElectionEconomics report(Paper 1)and the Executive Summary (Paper 2) that cover all the election 2015 briefings, discussing the research evidence on 15 of the UK's key policy battlegrounds: immigratio...Read more...

CEP election analysis

Top Rate of Income Tax

The main political parties disagree about the appropriate rate of income Tax on the highest incomes. This note lays out the economic principles surrounding the top rate of income tax and considers the evidence that high ...Read more...

CEP discussion paper

'American Idol' - 65 years of Admiration

Since the 1940s Gallup has, every December, asked Americans about the living man and woman they most admire. This paper documents the way in which the types of people who are admired has changed and argues that the respo...Read more...

CEP discussion paper

The Volatility of Earnings: Evidence from High-Frequency Firm-Level Data

The first contribution of this paper is to use UK monthly firm-level data to show that there is a large amount of transitory volatility in firm-level average earnings from month to month. We conclude that this cannot all...Read more...

CentrePiece article

Immigrant's access to social housing: perception and reality

Although most UK immigrants are likely to be eligible to apply for social housing, there is no evidence that they have preferential access – if anything the reverse seems to have been the case. But it does seem that ther...Read more...

CentrePiece article

Minimum wages: the economics and the politics

The UK’s national minimum wage has tackled extreme low pay – but the wider problem of low pay remains as serious as ever. That is one of the conclusions of Professor Alan Manning in a discussion of the growing popularity...Read more...

CEP discussion paper

Immigration and the Access to Social Housing in the UK

This paper investigates the impact of immigration on the probability of being in social housing in the UK. In recent years immigrant households are slightly more likely than natives to be in social housing but once one c...Read more...

CentrePiece article

Lovely and lousy jobs

The phenomenon of ‘job polarisation’ is increasing inequality as the labour market splits into high- and low-wage work. According to Alan Manning, who coined the term a decade ago, we cannot ignore job polarisation – but...Read more...

CEP discussion paper

Minimum Wages and Wage Inequality: Some Theory and an Application to the UK

Research suggests that, at the levels set in countries like the US and the UK, minimum wages have little effect on employment but do have impacts on wage inequality. However we lack models that can explain these facts – ...Read more...

CEP discussion paper

Steady-State Equilibrium in a Model of Short-Term Wage-Posting

This paper takes the canonical Burdett-Mortensen model of wage- posting and relaxes the assumption that wages are set once-for-all, instead assuming they can only be committed one period at a time. It derives a closed-fo...Read more...

CentrePiece article

The letters page

Alan Manning questions the value of researchers conducting debates about economic policy through the pages of newspapers....Read more...

CEP discussion paper

How Local Are Labour Markets? Evidence from a Spatial Job Search Model

This paper uses data on very small UK geographies to investigate the effective size of local labour markets. Our approach treats geographic space as continuous, as opposed to a collection of nonoverlapping administrative...Read more...

Journal article

Journal of the European Economic Association:

The impact of immigration on the structure of wages: theory and evidence from Britain

Immigration to the UK, particularly among more educated workers, has risen appreciably over the past 30 years and as such has raised labor supply. However studies of the impact of immigration have failed to find any sign...Read more...

CEP discussion paper

Explaining Job Polarization in Europe: The Roles of Technology, Globalization and Institutions

This paper shows the employment structure of 16 European countries has been polarizing in recent years with the employment shares of managers, professionals and low-paid personal services workers increasing at the expens...Read more...

CEP discussion paper

The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment

We reassess the effect of state and federal minimum wages on U.S. earnings inequality, attending to two issues that appear to bias earlier work: violation of the assumed independence of state wage levels and state wage d...Read more...

CEP discussion paper

Imperfect Competition in the Labour Market

It is increasingly recognized that labour markets are pervasively imperfectly competitive, that there are rents to the employment relationship for both worker and employer. This chapter considers why it is sensible to th...Read more...

CentrePiece article

The integration of immigrants and their children in Europe

The integration of immigrants and their children in Europe...Read more...

CEP discussion paper

The Economic Situation of First- and Second-Generation Immigrants in France, Germany and the United Kingdom

A central concern about immigration is the integration into the labour market, not only of the first generation, but also of subsequent generations. Little comparative work exists for Europe’s largest economies. France, ...Read more...

CentrePiece article

Big ideas: The UK's National Minimum Wage

Alan Manning describes CEP's role in providing the intellectual context for the policy, advising on its implementation and evaluating its impact....Read more...

CEP discussion paper

One Nation Under a Groove? Identity and Multiculturalism in Britain

There is a lot of evidence that identity matters for behavior. There is a widespread belief that societies will function better if they manage to establish a common sense of identity among the population. And there are a...Read more...

CEP discussion paper

Theory of Values

Economists have a well-developed theory of value but the theory of why people hold the values they do is rudimentary at best. In spite of the fact that it is common to argue that values are important, most work on values...Read more...

CEP discussion paper

Change and Continuity Among Minority Communities in Britain

There is widespread concern currently that some ethnic minority communities within Britain, especially Muslim, are not following the stereotypical immigrant path of economic and cultural assimilation into British society...Read more...

CEP discussion paper

Understanding the Gender Pay Gap: What's Competition Got to Do with It?

A number of papers have recently argued that men and women have different attitudes and behavioural responses to competition. Laboratory experiments suggest that these gender differences are very large but it is importan...Read more...

CentrePiece article

In Brief: Spend it like Beckham

Andreas Georgiadis and Alan Manning wonder why voters have not forced successive governments to increase taxes on the rich....Read more...

Journal article

The Economic Journal:

The part-time pay penalty for women in Britain

Women in Britain who work part-time have, on average, hourly earnings about 25% less than that of women working full-time. This gap has widened greatly over the past 30 years. This article tries to explain this part-time...Read more...

CentrePiece article

The Labour Market Effects of Immigration

What are the effects of increased immigration on the wages and employment of people who are already here, whether they are native-born or earlier immigrants? Research by Marco Manacorda, Alan Manning and Jonathan Wadswor...Read more...

CEP discussion paper

Spend It Like Beckham? Inequality and Redistribution in the UK, 1983-2004

A main activity of the state is to redistribute resources. Models of the political process generally predict that a rise in inequality will lead to more redistribution. This paper shows that, for the UK in the period 198...Read more...

CentrePiece article

Culture Clash or Culture Club? The Identity and Attitudes of Immigrants in Britain

Does Britain face a real threat from immigrants and minorities - particularly Muslims - who refuse to think of themselves as British? Alan Manning and Sanchari Roy have analysed data on the national identity and values o...Read more...

CEP discussion paper

Privatization, Entry Regulation and the Decline of Labor's Share of GDP: A Cross-Country Analysis of the Network Industries

Labor’s share of GDP in most OECD countries has declined over the last two decades. Some authors have suggested that these changes are linked to deregulation of product and labor markets. To examine this we focus on a la...Read more...

CEP discussion paper

Respect

Becker (1974) introduced to modern economics the idea that others care about what others think about them and derived many useful insights from this assumption. But he did not provide a very complete description of the g...Read more...

CEP discussion paper

Culture Clash or Culture Club? The Identity and Attitudes of Immigrants in Britain

There is economic evidence that diversity has consequences for economic performance (see Alesina and La Ferrara, 2005). This might have consequences for immigration policy – how many immigrants to allow into a country an...Read more...

Journal article

Review of Economics and Statistics:

Lousy and lovely jobs: the rising polarization of work in Britain

This paper shows that the United Kingdom since 1975 has exhibited a pattern of job polarization with rises in employment shares in the highest- and lowest-wage occupations. This is not entirely consistent with the idea o...Read more...

CEP discussion paper

The Plant Size-Place Effect: Agglomeration and Monopsony in Labour Markets

This paper shows, using data from both the US and the UK, that average plant size is larger in denser markets. However, many popular theories of agglomeration – spillovers, cost advantages and improved match quality – pr...Read more...

CEP discussion paper

The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain

Immigration to the UK has risen in the past 10 years and has had a measurable effect on the supply of different types of labour. But, existing studies of the impact of immigration on the wages of native-born workers in t...Read more...

CentrePiece article

The Gender Pay Gap

In its recent report on how to make further progress in closing the gender pay gap, the Women and Work Commission emphasises policy interventions before women enter the labour market. Alan Manning is sceptical about thei...Read more...

CEE/Education and skills discussion paper

Comprehensive Versus Selective Schooling in England and Wales: What Do We Know?

British secondary schools moved from a system of extensive and early selection and tracking in secondary schools to one with comprehensive schools during the 1960s and 70s. Before the reform, students would take an exam ...Read more...

CentrePiece article

The Part-Time Pay Penalty

Women working part-time in the UK have hourly earnings that are on average 26 percent less than women working fulltime. Alan Manning and Barbara Petrongolo investigate what's behind this part-time pay penalty....Read more...

CEP discussion paper

The Gender Gap in Early Career Wage Growth

In the UK the gender pay gap on entry to the labour market is approximately zero but after ten years after labour market entry, there is a gender wage gap of almost 25 log points. This paper explores the reason for this ...Read more...

CEP discussion paper

You Can't Always Get What You Want: the Impact of the Jobseeker's Allowance

In 1996 the UK made major changes to its welfare system for the support of the unemployed with the introduction of the Jobseeker’s Allowance. This tightened the work search requirements needed for eligibility for benefit...Read more...

CEP discussion paper

The Part-Time Pay Penalty

In 2003, women working part-time in the UK earned, on average, 22% less than women working full-time. Compared to women who work FT, PT women are more likely to have low levels of education, to be in a couple, to have yo...Read more...

Book

Monopsony in Motion: Imperfect Competition in Labor Markets

 What happens if an employer cuts wages by one cent? Much of labor economics is built on the assumption that all the workers will quit immediately. Here, Alan Manning mounts a systematic challenge to the standard mo...Read more...

Chapter

Mobility and Joblessness

in Seeking A Premier Economy: The Economic Effects Of British Economic Reforms, 1980-2000

The perceived impact of location on economic opportunity has been a constant refrain in discussions of the economic performance of the United Kingdom for as long as anyone can remember and the source of much feeling th...Read more...

CentrePiece article

Women Looking for Work

Female unemployment rates differ widely from county to country. Ghazala Azmat, Maia Güell and Alan Manning look for the reasons that might explain this particular gender gap....Read more...

CEP discussion paper

We Can Work It Out: the Impact of Technological Change on the Demand for Low Skill Workers

There is little doubt that technology has had the most profound effect on altering the tasks that we humans do in our jobs. Economists have long speculated on how technical change affects both the absolute demand for lab...Read more...

CEP discussion paper

Instrumental Variables for Binary Treatments with Heterogeneous Treatment Effects: A Simple Exposition

This note provides a simple exposition of what IV can and cannot estimate in a model with a binary treatment variable and heterogeneous treatment effects. It shows how linear IV is a misspecification of functional form a...Read more...

CEP discussion paper

Gender Gaps in Unemployment Rates in OECD Countries

There is an enormous literature on gender gaps in pay and labour market participation but virtually no literature on gender gaps in unemployment rates. Although there are some countries in which there is essentially no g...Read more...

CEP discussion paper

Lousy and Lovely Jobs: the Rising Polarization of Work in Britain

This paper argues that skill-biased technical change has some deficiencies as a hypothesis about the impact of technology on the labor market and that a more nuanced view recently proposed by Autor, Levy and Murnane (200...Read more...

CEP discussion paper

The Incidence of UK Housing Benefit: Evidence from the 1990s Reforms

Housing Benefit (HB) in the UK subsidizes the rent of tenants in both the private and public sectors. Its share in total welfare benefits has risen markedly through time and there is widespread dissatisfaction with it. B...Read more...

CEP discussion paper

The Real Thin Theory: Monopsony in Modern Labour Markets

Models of 'modern monopsony' based on job differentiation and/or search frictions seem to give employers non-negligible market power over their workers while avoiding the assumption of 'classical monopsony' that employer...Read more...

CentrePiece article

More Sellers Than Buyers

Alan Manning has been looking at the weaknesses of the classical model of market competition in explaining the behaviour of the labour market and argues that we should learn lessons from the monopsony model....Read more...

CEP discussion paper

Where the Minimum Wage Bites Hard: the Introduction of the UK National Minimum Wage to a Low Wage Sector

Between 1993 and April 1999 there was no minimum wage in the UK (except in agriculture). In this paper we study the effects of the introduction of a National Minimum Wage (NMW) in April 1999 on one heavily affected secto...Read more...

CEP discussion paper

Has The National Minimum Wage Reduced UK Wage Inequality?

This paper investigates the impact on the wage distribution of the introduction, in April 1999, of the National Minimum Wage in the UK. Because of the structure of UK earnings statistics, it is not straightforward to inv...Read more...

CEP discussion paper

The Structure of Wages in What Should be a Competitive Labour Market

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...Read more...

CEP discussion paper

Monopsony and the Efficiency of Labour Market Interventions

Implicit in many discussions of labour market policy is the assumption that, in the absence of interventions, the operation of the labour market is well-approximated by the perfectly competitive model. The merits or deme...Read more...

CEP discussion paper

A Generalised Model of Monopsony

Recent research in labour economics (e.g. the work of Card and Krueger, 1995, on the impact of minimum wages) has led to renewed interest in the appropriate model to use when thinking about the labour market. But, the st...Read more...

CEP discussion paper

Labour Supply, Search and Taxes

Classical labour supply theory is one of the most sophisticated parts of labour economics. Yet, there is no compelling theoretical reason to believe in an outcome on a classical labour supply curve and it is unclear whet...Read more...

CEP discussion paper

Pretty Vacant: Recruitment in Low Wage Labour Markets

This paper is a study of the process by which employers in five relatively low-wage British firms fill vacancies. It studies the determinants of the number and quality of applicants, the way in which these applicants are...Read more...

Journal article

Journal of Labor Economics:

The effects of minimum wages on employment: theory and evidence from Britain

Recent work on the economic effects of minimum wages has stressed that the standard economic model, where increases in minimum wages depress employment, is not supported by empirical work in some labor markets. We presen...Read more...

CEP discussion paper

Just Can't Get Enough:More On Skill-Biassed Change and Labour Market Performance

It is common to hear the argument that poor labour market performance in OECD countries in recent years is the result of shifts in relative demand against less-skilled workers. But, there is much dispute about whether th...Read more...

CEP discussion paper

The Causes and Consequences of Long-Term Unemployment in Europe

One of the most striking features of European labour markets is the high incidence of long-term unemployment. In this paper we review the literature on its causes and consequences. Our main conclusions are that: the rise...Read more...

CentrePiece article

The Third Way?

Read more...

CEP discussion paper

Something in the way She Movcs: A Fresh Look at an Old Gap

Most studies of the gender pay gap use cross-section earnings functions to apply a Oaxaca decomposition into the contributions of differences in characteristics and coefficients. But the accounts that these studies provi...Read more...

CEP discussion paper

Mighty Good Thing: The Returns to Tenure

The human capital earnings function is part of the toolbox of labour economists. Returns to labour market experience are interpreted as returns to general human capital, and returns to job tenure as returns to job-specif...Read more...

CEP discussion paper

Movin On Up: Interpreting the Earnings Experience Profile

Human capital theory provides the generally accepted interpretation of the relationship between earnings and labour market experience, namely that general human capital tends to increase with experience. However, there a...Read more...

CEP discussion paper

A Simple Test of the Shirking Model

Although popular in some circles, efficiency wage models of the labour market have proved surprisingly difficult to test and direct evidence for the central tenets of the theory is rare to non-existent. In this paper we ...Read more...

CEP discussion paper

Labour Markets with Company Wage Policies

In the conventional perfectly competitive model of the labour market, wage-setting is individualistic in the sense that identical workers should receive identical wages in different firms and different workers should rec...Read more...

CEP discussion paper

The Effect of Minimum Wages on UK Agriculture

Since the abolition of the Wages Councils in September 1993, agriculture is the only sector in the UK economy covered by any form of minimum wage legislation. This paper investigates the impact of the system of minimum w...Read more...

CEP discussion paper

Estimating the Effect of Minimum Wages on Employment from the Distribution of Wages: A Critical View

In two papers, Meyer and Wise (1983a,b) present an ingenious method for estimating the effect of minimum wage rates on wages and employment using data based only on the observed cross-sectional distribution of wages. The...Read more...

CEP discussion paper

How do we Know that Real Wages are Too High?

It is common belief that the wages that we observe are above the level that would prevail in a competitive labour market and also it is common to believe that wage moderation should be encouraged as a way to keep unemplo...Read more...

CEP discussion paper

The Effects of Minimum Wages on Employment: Theory and Evidence from Britain

Since the abolition of the Wages Councils in September 1993, agriculture is the only sector in the UK economy covered by any form of minimum wage legislation. This paper investigates the impact of the system of minimum w...Read more...

CEP discussion paper

Are Workers Paid their Marginal Product? Evidence from a Low Wage Labour Market

Because of labour market frictions, the supply of labour to a firm does not fall instantaneously to zero if an employer cuts wages. This gives employers some monopsony power. In the absence of trade unions, minimum wages...Read more...

CEP discussion paper

The Equal Pay Act as an Experiment to Test Theories of the Labour Market

The UK Equal Pay Act of 1970 resulted in a large rise in the relative earnings of women in the early 1970s. As this change (unlike most wage changes) was largely exogenous to employers one can think of this episode as an...Read more...

CEP discussion paper

Endogenous Labour Market Segmentation in a Matching Model

This paper extends work by Burdett and Mortensen (1989) and Mortensen and Vishwanath (1991) and examines equilibria in a matching model with identical firms and workers in which employed as well as unemployed workers rec...Read more...

CEP discussion paper

Wage Setting and the Tax System: theory and Evidence for the UK

This paper analyses the effect of a non-linear tax system on wage bargaining. The main conclusions are: an increase in the marginal income or payroll tax reduces the pre-tax wage; in the iso-elastic case, an increase in ...Read more...

CEP discussion paper

An Economic Analysis of the Effects of Pre-Strike Ballots

This paper uses a number of economic models to suggest ways in which the mandatory pre-strike ballots introduced in the UK Trade Union Act 1984 might be expected to affect union democracy, strike activity, wage and emplo...Read more...

CEP discussion paper

Minimum Wages

Debate about the effect of minimum wages on employment in the United Kingdom has not paid much attention to the impact of the existing system of minimum wages, the Wages Council. In this paper, we look at the consequence...Read more...

CEP discussion paper

The Employer Size-Wage Effect: Is Monopsony the Explanation?

This paper looks at evidence on the employer size-wage effect for the UK using data from the General Household Survey, British Social Attitudes Survey and the Workplace Industrial Relations Survey. We find that much larg...Read more...

CEP discussion paper

How Robust is the Microeconomic theory of the Trade Union?

This paper argues that the predictions of standard trade union models and the tests for distinguishing between these models are not robust to quite small and reasonable changes in the conventional assumptions. It shows h...Read more...

CEP discussion paper

Productivity Growth, Wage Setting and the Equilibrium Rate of Unemployment

This paper argues that one cannot tell a convincing story of the rise in OECD unemployment without mentioning the slowdown in productivity and real wage growth that occurred in the 1970s. It is argued that whereas most a...Read more...

CEP discussion paper

Wage Bargaining and the Phillips Curve: The Identification and Specification of Aggregate Wage Equations

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CEP discussion paper

Authority in Employment Contracts: A Bilateral Bargaining Model

This paper takes a model of the employment contract which is incomplete in the sense that the required effort level is not exactly specified when employment is agreed and in which each worker negotiates their own contrac...Read more...

CEP discussion paper

The Effects of union Density of Wages and Employment: A Dynamic Monopoly Union Model

This paper looks at wage and employment determination in a dynamic model where some workers, e.g. non-union members, continue to work in the event of a dispute. It shows that both wages and employment may be a non-monoto...Read more...

CEP discussion paper

Pre-Strike Ballots and Wage-Employment Bargaining

This paper attempts to construct a model of the economic effects of the introduction of pre-strike ballots in Britain in the Employment Act (1984). It argues that strike ballots tend to reduce union influence over issues...Read more...