Structural Change and Labour Market Adjustment
This paper reviews the process of short-run adjustment in labour markets in response to structural change. A basic framework for analysis is presented and empirical tests of the role of wages in adjustment are considered. It is argued that conventional correlation tests are mis-specified. Alternative tests are therefore proposed and applied, providing support for the Tobin-Solow view of the labour market as one of disaggregate disequilibrium.
KeywordsLabour Market Industrial Relation Excess Demand Relative Wage Employment Change
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