The spot market matters : evidence on implicit contracts from Britain

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Title: The spot market matters : evidence on implicit contracts from Britain
Authors: Devereux, Paul J.
Hart, Robert A.
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Date: Feb-2005
Abstract: Based on the methodology of Beaudry and DiNardo (1991), this paper investigates the relative importance of the spot market and implicit contracts in the determination of British real wages. Empirical work is carried out separately for males and females with individual level data taken from the New Earnings Survey Panel for the years 1976 to 2001. In contrast to previous studies that used North American data, the spot market is found to be more important than implicit contracts in determining real wages. Indeed, there is very little support for implicit contracts in these data. Further evidence is provided through the analysis of individual wage sequences. These suggest that the downwardly rigid wage sequences implied by implicit contracts with costless worker mobility are not prevalent in Britain.
Type of material: Working Paper
Publisher: Institute for the Study of Labor
Copyright (published version): The Institute for the Study of Labor (IZA) 2005
Keywords: Spot market wagesImplicit contractsUnemploymentWage sequences
Subject LCSH: Labor contract--Mathematical models
Personnel management--Mathematical models
Unemployment--Effect of wages on
Wages--Mathematical models
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Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Research Collection

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