A panel of regional indicators of labour market flexibility: the UK, 1979-1998

Abstract

Despite the centrality of the issue of labour market flexibility for policy and academic research, attempts to consistently measure leve ls of flexibility, either within or across countries, have been remarkably scarce. This paper presents a complete set of labour market flexibility indicators for the UK and its regions over the period 1979-1998, based on surveydata sources and relating directly to theoretical considerations existing in the literature. After discussing issues related to the measurement of flexibility and the construction of the indexes, we examine the evolution of labour market flexibility and its various forms, across the UK regions and over the twenty-year period of our study. This examination reveals a number of interesting findings: labour market flexibility increased throughout the period across all UK regions, but specific elements of flexibility have followed divergent and non- linear trends; evidence of convergence in the regional levels of flexibility co-exists with a rather persistent pattern of a North-South dichotomy and regional specialisation in different forms of flexibility; if anything, deregulation does not seem to have facilitated regional harmonisation in levels and forms of labour market flexibility.