Volume 7, Number 1 (Winter) 1972
Wachter, Michael L. 1972. "Wage Determination in a Local Labor Market: A Case Study of the Boston Labor Market." Journal of Human Resources 7(1):87-103.
In this study based on unpublished wage data collected from a select group of Boston area firms, it was found that the wage structure for unskilled and clerical workers was largely unchanged between 1960 and 1964, but narrowed significantly thereafter. The fact that the Boston unemployment rate was nearly constant during 1960-64 and decreased during 1965-69 suggests a positive relationship between wage dispersion and unemployment. Interfirm wage differentials for skilled workers remained largely unchanged throughout the ten-year period, a finding which supports the view that unemployment during the 1960s was largely concentrated among lower skilled occupations. The results have implications for the possible success of a new wage-price guideposts policy.
The author is Assistant Professor of Economics, Wharton School of Finance and Commerce, University of Pennsylvania. The article is a much abbreviated version of a chapter in the author's doctoral thesis, "Relative Wage Determination Among Industries: Some Theoretical and Empirical Results" (Harvard University, 1970). Interested readers are referred to that chapter for greater detail on data construction and empirical results. The thesis was done under Grant No. 91-23-68-57 from the Manpower Administration, U.S. Department of Labor, under the authority of Title I of the Manpower Development and Training Act of 1962, as amended. Researchers undertaking such projects under government sponsorship are encouraged to express freely their professional judgments. Therefore, points of view or opinions stated in this article do not necessarily represent the official position or policy of the Department of Labor. The author wishes to thank John T. Dunlop and Peter Doeringer for many helpful suggestions. Dr. Richard Walker and Miss Mary Downing of the Federal Reserve Bank of Boston provided considerable background material for the analysis of the Boston labor market data.
© 2003 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X