Pay determination and labour market outcomes in the UK

This project will develop new data on the impact of international trade on UK workers’ exposure to competition with workers abroad. It will also examine the influence of increased imports from low-wage countries on different participants in the UK labour market over the last two decades.

The researchers will consider two questions:

1. How has import penetration from low-wage countries changed in different sectors, occupations and areas of the UK? The team will use Commodities Trade Statistics (COMTRADE), a database disseminated by the United Nations Statistical Division, to analyse the changing nature of import competition in the UK since the early 1990s.
2. What effect have rising imports from low-wage countries had on the employment rates and wage outcomes of skilled and unskilled workers in the UK? The team will use the Labour Force Survey (LFS) and the New Earnings Survey (NES) to estimate the links and possible causal effects between the labour market outcomes of UK workers and import competition from low wage countries.

These questions are relevant to a number of debates in economics and industrial relations, including:

• The distributional impacts of globalisation
• Drivers of local area growth
• The disconnect between productivity and wage increases in the last decade
• The assessment of spare capacity in the economy and its importance in determining inflationary pressures.

The outputs from this this research will be of particular interest to academics and policymakers concerned with both monetary and social policy, and with regional growth issues, as well as to industrial relations specialists and labour economists.