IDEAS home Printed from https://ideas.repec.org/p/ecm/wc2000/1608.html
   My bibliography  Save this paper

Earnings, Unemployment, and Housing: Evidence from a Panel of British Regions

Author

Listed:
  • John Muellbauer

    (Nuffield College)

Abstract

This paper models regional earnings and unemployment in the ten regions of Great Britain between 1972 and 1995, paying particular attention to their interaction and to the important influence of the housing market. In contrast to Blanchard and Katz (1992, 1997) for the United States, we find less persistence in British regional earnings differentials but greater persistence in regional unemployment rates. We find no evidence of a negative effect of the overall unemployment rate on the earnings of men in non-manual, or women in full-time, employment and find a positive effect for women in part-time employment. However, for manual men, we find a significant elasticity of around -0.07, comparable with Blanchflower and Oswald (1994).

Suggested Citation

  • John Muellbauer, 2000. "Earnings, Unemployment, and Housing: Evidence from a Panel of British Regions," Econometric Society World Congress 2000 Contributed Papers 1608, Econometric Society.
    • Handle: RePEc:ecm:wc2000:1608
    as

    Download full text from publisher

    File URL: http://fmwww.bc.edu/RePEc/es2000/1608.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, April.
    2. Gavin Cameron & John Muellbauer, 1998. "The Housing Market and Regional Commuting and Migration Choices," Scottish Journal of Political Economy, Scottish Economic Society, vol. 45(4), pages 420-446, September.
    3. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, December.
    4. Muellbauer, John & Murphy, Anthony, 1997. "Booms and Busts in the UK Housing Market," Economic Journal, Royal Economic Society, vol. 107(445), pages 1701-1727, November.
    5. repec:bla:scotjp:v:45:y:1998:i:4:p:420-46 is not listed on IDEAS
    6. Olivier Blanchard & Lawrence F. Katz, 1997. "What We Know and Do Not Know about the Natural Rate of Unemployment," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 51-72, Winter.
    7. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    8. Costas Megir & Danny Quah, 1996. "Regional Convergence Clusters Across Europe," CEP Discussion Papers dp0274, Centre for Economic Performance, LSE.
    9. Jackman, Richard & Savouri, Savvas, 1992. "Regional Migration versus Regional Commuting: The Identification of Housing and Employment Flows," Scottish Journal of Political Economy, Scottish Economic Society, vol. 39(3), pages 272-287, August.
    10. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    11. Yongcheol Shin & Ron P Smith & Mohammad Hashem Pesaran, 1998. "Pooled Mean Group Estimation of Dynamic Heterogeneous Panels," Edinburgh School of Economics Discussion Paper Series 16, Edinburgh School of Economics, University of Edinburgh.
    12. repec:bla:econom:v:53:y:1986:i:210(s):p:s121-69 is not listed on IDEAS
    13. Richard Jackman & Richard Layard & S Savouri, 1990. "Mismatch: A Framework for Thought," CEP Discussion Papers dp0001, Centre for Economic Performance, LSE.
    14. Blackaby, D H & Manning, D N, 1992. "Regional Earnings and Unemployment--A Simultaneous Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(4), pages 481-501, November.
    15. Quah, Danny, 1996. "Regional Convergence Clusters Across Europe," CEPR Discussion Papers 1286, C.E.P.R. Discussion Papers.
    16. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    17. Hendry, David F, 1997. "The Econometrics of Macroeconomic Forecasting," Economic Journal, Royal Economic Society, vol. 107(444), pages 1330-1357, September.
    18. Anthony Murphy & John Muellbauer, 1994. "Explaining regional house prices in the UK," Working Papers 199421, School of Economics, University College Dublin.
    19. McCormick, Barry, 1997. "Regional unemployment and labour mobility in the UK," European Economic Review, Elsevier, vol. 41(3-5), pages 581-589, April.
    20. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
    21. David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June.
    22. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    23. David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
    24. Gordon Hughes & Barry McCormick, 1991. "Housing Markets, Unemployment and Labour Market Flexibility in the U.K," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 83-114, National Bureau of Economic Research, Inc.
    25. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    26. Richard Jackman & S Savouri, 1992. "Regional Migration versus Regional Commuting: The Identification of Housing and Employment Flows," CEP Discussion Papers dp0057, Centre for Economic Performance, LSE.
    27. David Card, 1995. "The Wage Curve: A Review," Working Papers 722, Princeton University, Department of Economics, Industrial Relations Section..
    28. J. D. Sargan, 1980. "A Model of Wage-Price Inflation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 97-112.
    29. repec:bla:scandj:v:92:y:1990:i:2:p:215-35 is not listed on IDEAS
    30. Quah, Danny T., 1996. "Regional convergence clusters across Europe," European Economic Review, Elsevier, vol. 40(3-5), pages 951-958, April.
    31. Robert E. Hall, 1970. "Why Is the Unemployment Rate So High at Full Employment?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 1(3), pages 369-410.
    32. Pissarides, Christopher A & McMaster, Ian, 1990. "Regional Migration, Wages and Unemployment: Empirical Evidence and Implications for Policy," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 812-831, October.
    33. Cameron, Gavin & Muellbauer, John, 2000. "Earnings Biases in the United Kingdom Regional Accounts: Some Economic Policy and Research Implications," Economic Journal, Royal Economic Society, vol. 110(464), pages 412-429, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. van de Ven, J., 2001. "Simulating Cohort Earnings for Australia," Department of Economics - Working Papers Series 780, The University of Melbourne.
    2. Geoffrey Meen, 2001. "The Economic Role of New Housing," ERES eres2001_231, European Real Estate Society (ERES).
    3. Victor Montuenga & Inmaculada Garcia, 2011. "The wage dynamics in Spain: evidence from individual data," ERSA conference papers ersa11p585, European Regional Science Association.
    4. Robert Rowthorn, 2005. "Combined and Uneven Development: Reflections on the North-South Divide," Working Papers wp305, Centre for Business Research, University of Cambridge.
    5. Ghatak, Subrata & Mulhern, Alan & Watson, John, 2007. "Inter-regional migration in transition economies: the case of Poland," Economics Discussion Papers 2007-7, School of Economics, Kingston University London.
    6. Ghatak, Subrata & Pop-Silaghi, Monica Ioana, 2009. "Inter-regional migration in Romania," Economics Discussion Papers 2009-4, School of Economics, Kingston University London.
    7. Robert Rowthorn, 2010. "Combined and Uneven Development: Reflections on the North–South Divide," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(4), pages 363-388.
    8. Nigel Driffield & Karl Taylor, 2006. "Wage Spillovers, Inter-regional Effects and the Impact of Inward Investment," Spatial Economic Analysis, Taylor & Francis Journals, vol. 1(2), pages 187-205.
    9. J. Carluccio., 2014. "How do house prices affect wages? A comparison between France and Germany," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 34, pages 69-94, summer.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gavin Cameron & John Muellbauer, 2001. "Earnings, unemployment, and housing in Britain," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 203-220.
    2. Inmaculada Garcia-Mainar & Victor Montuenga-Gomez, 2003. "The Spanish Wage Curve: 1994-1996," Regional Studies, Taylor & Francis Journals, vol. 37(9), pages 929-945.
    3. Iara, Anna & Traistaru, Iulia, 2004. "How flexible are wages in EU accession countries?," Labour Economics, Elsevier, vol. 11(4), pages 431-450, August.
    4. Wouter Vermeulen & J. van Ommeren, 2006. "Compensation of regional unemployment in housing markets," CPB Discussion Paper 57, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Jens Suedekum, 2005. "Increasing returns and spatial unemployment disparities," Papers in Regional Science, Wiley Blackwell, vol. 84(2), pages 159-181, June.
    6. Stephen Drinkwater, 2003. "Estimating the willingness to move within Great Britain: Importance and implications," School of Economics Discussion Papers 1203, School of Economics, University of Surrey.
    7. Bill Collier, 2000. "The UK Wage Curve: New Evidence from the British Household Panel Survey," Studies in Economics 0010, School of Economics, University of Kent.
    8. Elhorst, J. Paul, 2000. "The Mystery Of Regional Unemployment Differentialsa Survey Of Theoretical And Empirical Explanations," ERSA conference papers ersa00p60, European Regional Science Association.
    9. Muellbauer, John & Murphy, Anthony & Cameron, Gavin, 2006. "Housing Market Dynamics and Regional Migration in Britain," CEPR Discussion Papers 5832, C.E.P.R. Discussion Papers.
    10. Cameron, Gavin & Muellbauer, John & Murphy, Anthony, 2006. "Housing Market Dynamics and Regional Migration in Britain," CEPR Discussion Papers 5832, C.E.P.R. Discussion Papers.
    11. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    12. Danny Quah, 1996. "Aggregate and Regional Disaggregate Fluctuations," CEP Discussion Papers dp0275, Centre for Economic Performance, LSE.
    13. Víctor M. Montuenga‐Gómez & José M. Ramos‐Parreño, 2005. "Reconciling the Wage Curve and the Phillips Curve," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 735-765, December.
    14. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    15. Wouter Vermeulen & Jos Van Ommeren, 2009. "Compensation of Regional Unemployment in Housing Markets," Economica, London School of Economics and Political Science, vol. 76(301), pages 71-88, February.
    16. repec:dgr:rugsom:00c06 is not listed on IDEAS
    17. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
    18. Wouter Vermeulen & Jos Van Ommeren, 2009. "Compensation of Regional Unemployment in Housing Markets," Economica, London School of Economics and Political Science, vol. 76(301), pages 71-88, February.
    19. Jaakko Pehkonen & Hannu Tervo, 1998. "Persistence and Turnover in Regional Unemployment Disparities," Regional Studies, Taylor & Francis Journals, vol. 32(5), pages 445-458.
    20. Sarantis LOLOS & Evangelia PAPAPETROU, 2012. "Unemployment disparities and persistence Assessing the evidence from Greek regions, 1981-2008," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 12(1), pages 69-90.

    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecm:wc2000:1608. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/essssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.