Wages and unemployment in interwar Britain

Beenstock, Michael; Warburton, Peter

doi:10.1016/0014-4983(86)90011-2

Cited by 48 publications

(19 citation statements)

References 6 publications

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“…These and related results corroborating CG's thesis that real wages had a major influence on the slump and boom of the 1930s are reported in Beenstock and Warburton (1986).…”

Section: Input and Output Pricessupporting

confidence: 91%

Real Wages and Unemployment in the 1930s: A Reply

Beenstock

1987

Natl. Inst. econ. rev.

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In January 1984 the Bank of England Panel of Academic Consultants held a meeting to discuss the economic recovery in Britain in the early 1930s. The proceedings were published in Panel Paper no. 23. There were two main papers, one by David Worswick and the other by myself, Forrest Capie and Brian Griffiths (BCG). Our main contribution was to argue that the recession was largely triggered on the supply side rather than the demand side.In the November issue of the Review two signed special articles on the economic recovery were published which followed up some of the issues raised at the Bank of England. One was by David Worswick and the other by Nicholas Dimsdale who criticised several aspect of the BCG thesis.Our thesis had numerous elements, not all of which were challenged. The main claims that were challenged were: (a) that the growth of unemployment in 1930/1 and its subsequent abatement was prompted, inter alia, by real wage developments. in particular, own product real wages affected the demand for labour in manufacturing; (b) that the recovery was largely triggered by real wage moderation and associated supply side developments rather than developments on the demand side.Worswick challenged BCG on the latter while Dimsdale contested BCG on the former. Here on behalf of BCG I reply to these criticisms. In doing so I summarise econometric tests of BCG's main thesis.These results, which have been published elsewhere, corroborate BCG's principal claims about the influence of real wages on the sharp increase in unemployment during the first years of the 1930s and its reduction thereafter.

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“…These and related results corroborating CG's thesis that real wages had a major influence on the slump and boom of the 1930s are reported in Beenstock and Warburton (1986).…”

Section: Input and Output Pricessupporting

confidence: 91%

Real Wages and Unemployment in the 1930s: A Reply

Beenstock

1987

Natl. Inst. econ. rev.

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“…A related controversy has arisen in Britain, where writers, such as Benjamin and Kochin (1979) and Beenstock and Warburton (1986), have argued that supply side factors in the form of state provided unemployment benefits can explain the persistence of unemployment. This view is in marked contrast to the traditional Keynesian analysis, which emphasises deficient demand as the prime cause of interwar unemployment.…”

Section: Introductionmentioning

confidence: 99%

The Causes of Unemployment in Interwar Australia

Dimsdale¹,

Horsewood

2002

Economic Record

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This paper examines the factors contributing to unemployment in Australia during the Great Depression of the 1930s. Previous writers have emphasised the role of demand–side variables but it has also been argued that excessive real wages caused unemployment. The Layard–Nickell model, developed originally for the postwar British economy, is applied to Australian data. The empirical results confirm that demand shocks in the form of changes in government spending and in the terms of trade were important in both downturn and recovery. Wage indexation resulted in some rigidity of real wages but this was not a major cause of unemployment.

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“…This specification of aggregate demand is common to most of the existing literature in this area (cf. Beenstock and Warburton, 1986;Dimsdale, 1984;Dimsdale et al, 1989).…”

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confidence: 99%

Real Wages, Demand and Employment in the UK 1921–1938: A Disaggregated Analysis

Turner¹,

Bowden²

1997

Bulletin of Econ Res

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This paper uses the Layard and Nickell model of the labour market to examine the determinants of employment at a sectoral level for the interwar UK economy. Sectoral level data permits examination of the differing responses to changes in the determinants of employment. Estimation of employment functions indicates significant elasticities with respect to aggregate demand variables across a wide range of sectors but less support for a negative real wage effect, particularly in those industries responsible for major losses in employment. The evidence is therefore more consistent with the low-aggregate-demand explanation of labour market behaviour than it is with the high-real-wage hypothesis.

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Wages and unemployment in interwar Britain

Cited by 48 publications

References 6 publications

Real Wages and Unemployment in the 1930s: A Reply

Real Wages and Unemployment in the 1930s: A Reply

The Causes of Unemployment in Interwar Australia

Real Wages, Demand and Employment in the UK 1921–1938: A Disaggregated Analysis

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