TY  - JOUR
AU  - Pencavel,John H.
TI  - Employment, Wages, and Unionism in a Model of the Aggregate Labor Market in Britain
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3030
PY  - 1989
Y2  - July 1989
UR  - http://www.nber.org/papers/w3030
L1  - http://www.nber.org/papers/w3030.pdf
N1  - Author contact info:
John H. Pencavel
Department of Economics
Landau Economics
Stanford University
Stanford, CA  94305-6072
Tel: 650-723-3981
E-Mail: pencavel@stanford.edu
AB  - Two propositions figure prominently in explanations for Britain's comparatively low growth in employment: first, the wage-setting mechanism is insufficiently responsive to the growth of unemployment and, second, there exists a well-defined negative causal relationship  from wages to employment with the features of a conventional labor demand function. Using aggregate annual observations from 1953 to 1979, find the evidence for a conventional labor demand curve to be fragile and find little support for the notion that trade union objectives are unaffected by unemployment as some versions of the "insider-outsider" hypothesis would maintain. In general, the empirical results in this paper emphasize that confident inferences about Britain's employment record cannot be drawn from aggregate data.
ER  -