The occupational wage structure in local labour markets

Abstract

Examines changes in the responsiveness of occupational wages to occupational unemployment rate in Atlanta, Cleveland, Los Angeles and Philadelphia over the 1977‐1990 period. Finds evidence that the wage responsiveness to unemployment increased during the 1980s and that our model does a good job in explaining changes in the relative wage across the four occupational groups in the local labour markets. These results are consistent with the belief that the interaction of market forces, such as technical change and international competitions and institutional changes, such as the decline in unionization, played an important role in increasing relative wage dispersion during the 1980s.