Real Wages and Unemployment in the Big Squeeze

P Gregg, Stephen Machin, M Fernandez Salgado

Research output: Contribution to journalArticle

27 Citations (Scopus)
129 Downloads (Pure)

Abstract

UK real wage growth has slowed down, stagnated and recently turned sharply negative. We document the nature of real wage changes across the wage distribution over the last three decades, showing that recent patterns represent a distinct break of trend that pre-dates the onset of recession. We explore whether unemployment has become a stronger moderating influence on real wage growth and report, using aggregate economy-wide and regional panel data, that real wage–unemployment sensitivities have become stronger in the period from 2003 onwards. Finally, we offer some assessment of possible drivers of this increased sensitivity of real wages to unemployment.
Original languageEnglish
Pages (from-to)408-432
Number of pages25
JournalThe Economic journal
Volume124
Issue number576
DOIs
Publication statusPublished - 1 May 2014

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Unemployment
Real wages
Wage growth
Recession
Panel data
Wage distribution

Keywords

  • Real wages
  • Price inflation
  • Unemployment

Cite this

Real Wages and Unemployment in the Big Squeeze. / Gregg, P; Machin, Stephen; Fernandez Salgado, M.

In: The Economic journal, Vol. 124, No. 576, 01.05.2014, p. 408-432.

Research output: Contribution to journalArticle

Gregg, P, Machin, S & Fernandez Salgado, M 2014, 'Real Wages and Unemployment in the Big Squeeze', The Economic journal, vol. 124, no. 576, pp. 408-432. https://doi.org/10.1111/ecoj.12139
Gregg, P ; Machin, Stephen ; Fernandez Salgado, M. / Real Wages and Unemployment in the Big Squeeze. In: The Economic journal. 2014 ; Vol. 124, No. 576. pp. 408-432.
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