Short run labour supply: evidence from manufacturing establishments in the North East

Abstract

This thesis draws upon both survey data and standard sources to argue that competitive labour markets exist and that the assumption of economic rationality in a market context assists an understanding of the behaviour and attitudes of suppliers of labour services. Detailed analysis of the survey areas and the job histories of respondents suggests that spatial and occupational mobility may be substitutes and that these market dimensions are much more important than the industrial. Geographical and occupational mobility are therefore studied in greater depth through aggregate data although explanations at the level of individual decisions are presented throughout. It is found that labour markets are highly complex; for example they may overlap spatially and occupational markets may be inter-related. Factors affecting the training decision are also very complicated but partial explanations are suggested and a further chapter studies the distinction between general and specific training from the viewpoint of the worker rather than the firm. The traditional approach can be supplemented by recognising the phenomena of imperfect, costly information and job search. Inefficient information systems are one reason why different groups might adopt various short run strategies to achieve long run equilibrium. These groups are identified and the analysis presented indicates a line of further research aimed at understanding the key problems of differential lengths and incidences of unemployment and many workers accepting lower pay levels than in their previous job.