Wages and labour mobility - inter-industry study

Abstract

There are grounds for general scepticism regarding the importance ofrelative wages in allocating labour between industries in the manufacturing sector of the economy. The main findings of the massive OECD study Wages and Labour Mobility showed 'no evidence of a strong systematic statistical relationship between changes in earnings among individual industries and variations in relative employment' (p. 16). The chief exceptions to this conclusion were the findings that 'declining relative earnings appear to operate as an incentive to job-leavings' and 'an expanding industry which is poorly placed to intercept a recruitment stream . . . may find it necessary to implement above average increases" (p. 117). In the Irish context, Kennedy and Dowling have confirmed the overall findings of the OECD study regarding the weak association between wages and changes in employment.