Schmitt, John T
(1993)
Earnings and unemployment in Britain 1974-1988: Evidence from a times series of general household surveys.
PhD thesis, London School of Economics and Political Science.
Abstract
This thesis constructs a consistent data set of labour market variables from the annual British General Household Survey for the years 1974 to 1988. It uses this data to investigate the nature and causes of key developments in the distribution of earnings and incidence of unemployment for working age males. The principal findings of the thesis are: (1) Financial returns to education and experience increased substantially during the 1980s, probably due to a large increase in demand for skilled labour. Despite relative losses, real earnings for workers without educational qualifications increased by about 15 percent between 1974 and 1988. (2) After declining slightly during the 1970s, overall earnings inequality increased sharply in the 1980s. The increase in education and experience differentials accounted for only one-third to one-half of the increase in overall inequality. The rest of the rise occurred within education and experience groups. A shift in relative labour demand in favour of workers with high levels of labour market skills again appears to be the most likely explanation. (3) Education and experience levels have an important impact on an individuals probability of becoming and remaining unemployed. Adjusting conventional estimates of the returns to education and experience significantly increases the measured returns to these skills. (4) Once unemployed, changes in the level of unemployment benefits over the range prevailing in Britain during 1979-82 have no measurable effect on the search effort of unemployed benefit claimants.
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