The North-South Divide: Earnings, unemployment and cost of living differences in Great Britain

Abstract

This paper investigates the impact of regional labour market conditions and cost of living differentials on regional earnings in Britain. Unemployment duration is found to be of crucial importance when data from the General Household Surveys of 1975 and 1982 and the New earnings Surveys from 1970–86 are analysed. In particular, those with unemployment durations over 52 weeks appear to exert little downwards pressure on earnings. This has important implications for policy since the incidence of such long-term unemployment has been geographically concentrated in the less-prosperous regions of Britain.