Machin, Stephen and Manning, Alan ORCID: 0000-0002-7884-3580 (2002) The structure of wages in what should be a competitive labour market. CEPDP (532). London School of Economics and Political Science. Centre for Economic Performance, London, UK. ISBN 0753015536
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Abstract
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 of what should be a competitive labour market as: (i) there are a large number of small firms undertaking a very homogeneous activity in concentrated geographical areas; and (ii) the workers they employ are not unionized, nor are they covered by any minimum wage legislation so that there are effectively no external constraints on the wage-setting process. We find that the structure of wages does not, in important respects, resemble what we would expect in a competitive labour market. We find there is a small amount of wage dispersion within firms and a correspondingly large amount between firms. And, the wage dispersion that is present does not seem to be closely related to the productivity related characteristics of workers. We propose a test of the hypothesis that unobserved labour quality can explain our findings and reject it. The paper concludes with a discussion of other possible explanations of the patterns in our data.
Item Type: | Monograph (Discussion Paper) |
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Official URL: | http://cep.lse.ac.uk |
Additional Information: | © 2002 the authors |
Divisions: | Centre for Economic Performance Economics |
Subjects: | H Social Sciences > HD Industries. Land use. Labor |
JEL classification: | J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining |
Date Deposited: | 29 Jul 2008 09:49 |
Last Modified: | 01 Oct 2024 03:16 |
URI: | http://eprints.lse.ac.uk/id/eprint/20080 |
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