Earnings, overtime and regional labour markets

This paper examines the growth of earnings in all regions of Great Britain from 1974 to 1991. The central hypotheses of the paper are that disaggregation of weekly earnings into its constituents is helpful in understanding regional labour markets and that the standard regions do not correspond to distinct regional labour markets. Our results indicate support for both hypotheses. In terms of policy issues, our results do suggest that targeting expenditure towards the regions in order to reduce regional unemployment may not be wholly productive. Our results also suggest that if direct intervention into regional labour markets is considered, then the notion of a region will need to be a broad one.