Discussion Paper Details

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Title: The British Labour Market in Different Economic Eras, 1857-1938

Author(s): Timothy J. Hatton

Publication Date: May 1984

Keyword(s): Demand for Labour, Phillips Curve and Supply of Labour

Programme Area(s): Human Resources

Abstract: In this paper a simple model of aggregate supply and demand for labour is developed which includes a "surprise" supply function and imposes labour market clearing. This model is estimated on British data for 1857 to 1938, an important period for the original Phillips curve estimates. For 1857-1913, the model specified in the nominal wage fits well and structural breaks are rejected but wage change outperforms wage surprise, supporting the traditional Phillps curve type view. The period 1921-38 is found to produce different results yielding a structural break from 1857-1913 in both supply and demand equations. These shifts cannot be accounted for by the introduction of national insurance though it had some effect on the labour demand curve.

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Bibliographic Reference

Hatton, T. 1984. 'The British Labour Market in Different Economic Eras, 1857-1938'. London, Centre for Economic Policy Research.