Schlüter, Teresa (2013) Real wages, amenities and the adjustment of working hours across regional labour markets. SERC Discussion Papers (SERCDP130). Spatial Economics Research Centre (SERC), London School of Economics and Political Science, London, UK.
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Abstract
This article establishes a link between the traditional labour economics and the urban economics literature by analyzing differences in working hours across regional labour market areas in the UK. Using a real wage index reflecting skill adjusted earnings net of quality adjusted house prices in Britain and panel data on working hours the effect of regional real wages on labour supply is assessed. The identification strategy relies on workers who move across 157 labour market areas in Britain and includes individual fixed effects. The main finding is that working hours are significantly higher in labour market areas that offer lower real wages. Decreasing real wages by £1000 results in an increase of working hours of 0.3 %. Real wage differentials can be seen as a proxy for the local amenity level. I can replicate my finding including a set of amenities instead of the real wage index. The effect is mainly due to labour supply decisions of low skilled workers who work significantly longer hours in low real wage areas than high skilled workers. This indicates that low skilled workers are willing to increase their labour supply in order to afford living in high amenity areas.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://www.spatialeconomics.ac.uk/SERC/publication... |
| Additional Information: | © 2013 The Author |
| Divisions: | Spatial Economics Research Centre |
| Subjects: | H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor |
| Date Deposited: | 31 Jul 2014 07:42 |
| Last Modified: | 11 Dec 2024 19:12 |
| Funders: | Economic and Social Research Council, Department for Business, Innovation & Skills (BIS), Welsh Assembly Government |
| URI: | http://eprints.lse.ac.uk/id/eprint/58529 |
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