Saleheen, J; (1995) Wage Inequality, Job Mobility and Regional Migration in Britain. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

The hypothesis that wages are a key determinant of labour mobility has been prominent in the literature for some time. In Britain during the 1980s, wage inequality at the national level increased dramatically. Such a change in the distribution of wages is likely to alter the relative wage between a variety of types of employment. The purpose of this thesis is to document this change across regions, occupations and other observable characteristics, and to analyse the response of labour mobility to changes in relative wages. Using data from the Labour Force Survey, the General Household Survey and New Earnings Survey three types of labour mobility are considered. A change of region, a change out of employment into self-employment and, a move up the occupational ladder. The analyses of national wage inequality indicates that a small proportion was associated with rising inequality between regions; most of the rise was within regions. Moreover, within regions the inequality trend was quite varied; some regions had a large rise and others a small rise. Upward and outward mobility was found to be more responsive to regional unemployment and vacancy rates (quantity signals) suggesting the importance of local demand conditions. Wage relativities (price signals) were important for all outward moves but for upward movements they were important only for young workers. This is consistent with the idea that transaction costs are smaller for young workers. Mobility between regions was strongly responsive to price signals. The responsiveness to quantity signals however was weak and often statistically insignificant. Tracing regional mobility over the eighties revealed that mobility was less responsive to price signals by the end of the decade. This is relevant to the British policy debate on, whether the market has become more flexible because, in terms of regional mobility this study finds no evidence of increased labour market flexibility.

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