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Chapter III. Unemployment

Published online by Cambridge University Press:  26 March 2020

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Extract

The growth of registered unemployment since the mid-1960s has the appearance of a cycle of increasing amplitude about an accelerating upward trend. Chart 1 illustrates this well. The cyclical variation of unemployment was already familiar before the 1960s and its behaviour is, we would maintain, quite predictable and reasonably well understood. The upward trend, however, was not predicted and its origin and significance are matters of uncertainty and dispute. The nature of the problem is highlighted by the contrast between the upward trend in registered unemployment and the almost trendless series for notified vacancies. These two series and the other labour market indicators in table 1 all show a consistent cyclical movement but their secular growth rates are quite different.

Type
Articles
Information
National Institute Economic Review , Volume 106 , November 1983 , pp. 39 - 48
Copyright
Copyright © 1983 National Institute of Economic and Social Research

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References

note 1 in page 41 The MSC have expressed the view that the share of labour market turnover handled by official job centres has increased (see ‘The General Employment Service in Great Britain, 1982’ para. 3.23, footnote 6). The orders of magnitude quoted in this para graph are believed to be consistent with their calculations based on the exchange of P45 forms, but further work on this data is now in hand at MSC.

note 2 in page 41 Department of Employment Gazette, February 1983.

note 1 in page 42 For a systematic study of female participation rates see H. Joshi, R. Layard and S. Owen ‘Why are more women working in Britain?’ Centre for Labour Economics LSE, Discussion Paper, 162,

note 2 in page 42 A slightly different decomposition could be made by recalculating the 1971 figures using 1981 activity rates.

note 1 in page 43 Great uncertainty attaches to both the output and the employ ment figures over this period.

note 2 in page 43 The influence of expectations is discussed in S. Wren-Lewis and S. G. B. Henry ‘Manufacturing employment and expected output’ NIESR Discussion Paper, No. 55. For a general discussion see L. Mendis and J. Muellbauer ‘Has there been a British produc tivity breakthrough Centre for Labour Economics, LSE, Discussion Paper. 170.

note 3 in page 43 It is possible, however, that the efficiency of an hour's work declines with the number of hours worked per week.

note 1 in page 46 This rate of increase is reduced by changes in the composition of the labour force and does not imply that the net wage of a typical worker rose quite so slowly.

note 2 in page 46 For an interesting recent paper bearing on this question see D. Symons and R. Layard, ‘Neo-classical demand for labour functions for six major economies’, Centre for Labour Economics, LSE Discussion Paper, 166.