TY  - JOUR
AU  - Blanchflower,David G.
TI  - Fear, Unemployment and Pay Flexibility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3365
PY  - 1991
Y2  - October 1991
UR  - http://www.nber.org/papers/w3365
L1  - http://www.nber.org/papers/w3365.pdf
N1  - Author contact info:
David G. Blanchflower
Bruce V. Rauner Professor of Economics
6106 Rockefeller Hall
Dartmouth College
Hanover, NH  03755-3514
Tel: 603/646-2536
Fax: 603/646-2122
E-Mail: David.G.Blanchflower@Dartmouth.EDU
AB  - The paper uses newly available cross-section data to study wage determination in the United Kingdom in the 1980s. The results are contrasted with those from a comparable sample from the US from 1977-1988. 
1) Fear of unemployment substantially depresses pay in both countries.
2) There is some evidence of a wage ratchet in the UK whereby rates of pay are more flexible upwards than downwards.
3) The unemployment elasticity of pay averages -0.1 in the UK and apparently zero in the US.
4) Wages are almost twice as flexible in non-union and small workplaces in the UK.
ER  -