The Wage Curve
The Wage Curve casts doubt on some of the most important ideas in macroeconomics, labor economics, and regional economics. According to macroeconomic orthodoxy, there is a relationship between unemployment and the rate of change of wages. According to orthodoxy in labor economics and regional economics, an area's wage is positively related to the amount of joblessness in the area. The Wage Curve suggests that both these beliefs are incorrect. Blanchflower and Oswald argue that the stable relationship is a downward-sloping convex curve linking local unemployment and the level of pay. Their study, which is one of the most intensive in the history of social science, is based on random samples that provide computerized information on nearly four million people from sixteen countries. Throughout, the authors systematically present evidence and possible explanations for their empirical "law" of economics.
HardcoverOut of Print ISBN: 9780262023757 493 pp. | 9.1 in x 6.3 in
Paperback$38.00 X ISBN: 9780262517027 493 pp. | 9.1 in x 6.3 in
This is a remarkable book in many ways. It has one major theme: that wages are inversely related to unemployment across areas and industries, with coefficients that are quite similar over time and among countries. There are few strong empirical reguilarities in economics. This book goes a very long way to establishing one, which is quite impressive. There are few empirical pieces in social science that so devastate an existing point of view.
Richard B. Freeman
Department of Economics, Harvard University
This book rigrously establishes the wage curve—a downward sloping relationship between the wage level and the unemployment rate—as one of the most pervasive phenomenon of modern economies. but what does it mean? Blanchflower and Oswald's attempts at explaining the wage curve will provoke much theorizing on the operation of the labor market. And this much is clear: The Wage Curve should be the starting point for all serious future work on the relationship between wages and unemployment.
Professor, Princeton University
For the past 60 years, economists have struggled with the question of whether higher unemployment raises or lowers average wages. With this book, Blanchflower and Oswald resolve an important piece of the puzzle. People who work in labor markets with higher unemployment earn a substantially lower wage. This simple fact may be as close as we come to an empirical law in modern economics.
Labour economics is in ferment [and] this book is a good point ofentry to the argument.