The thesis deals with the analysis of dynamic econometric models which includes Time-Series methods. Conditional modelling and the General to Specific approach combined with Destructive testing. The modelling strategy used is dependent on the requirements of the modeller, whether he needs to Forecast, to derive policy or to produce results to support or deny a particular theory. Expectations introduce dynamics into econometric specifications and rational or consistent expectations models in particular have number of representations, which depend on the form of the inter-temporal optimisation problem and the method of solving for the expectations. Here we use the Vector AutoRegressive(VAR) form to estimate predictions of variables which are exogenous, an Errors-in-Variables method to produce initial estimates of structural parameters and a recursive systems approach to estimate the backward-forward representation. Vector autoregressive models of manufacturing wages, output prices, manufacturing inventory accumulation and vacancies are estimated using a general modelling strategy to derive predictions and one step ahead forecasts. These results are then fed into a structural model of output and employment which is estimated using a recursive estimation technique that solves out the endogenous expectations and then replaces the exogenous ones using the Wiener-Kolmogorov prediction formula. Finally we discuss generalisations of the first order rational expectations model to produce first order euler conditions which bear a closer correspondence to estimated error correction models with which they are related. The inter-temporal optimisation problem is extended to deal with lags and leads on exogenous variables, non-separabilities and lags on adjustment costs. Local and Global Identification conditions are presented for all of the models in the study.

In the present study we wish to address four related questions. Firstly we ask what effect sectoral imbalance has had on aggregate unemployment. We examine this question in Chapter 2 using the framework of regional wage determination and evidence from Great Britain over the period 1975-1989. Secondly we ask why such an imbalance should persist over time and why labour does not move to equilibriate its compensating differentials across regions. We attempt to answer this question in Chapters 3 and 4 using a model of migration flows based on the theory of the 'hiring function' and use evidence on bilateral migration flows across the standard regions of Great Britain over 1975-1989. Thirdly we wish to examine whether long-term unemployment distorts the working of the labour market by examining its effects on regional wage determination in Chapter 2 and on migration Chapters 3 and 4. Finally we examine whether certain developed economies have been more successful than others in curbing both excessive unemployment growth and unemployment persistence. In Chapter 5 we attempt to explain such contrasting performance by comparing differences in institutional features and the more pragmatic active labour market intervention in the form of training and other employment related measures initiated by different countries following each of the two oil price shocks. In comparing national labour market performance we use comparable data of the 14 main OECD member countries covering the period from the mid 1970s to the late 1980s.

This thesis comprises five chapters that together offer some contribution to the economics of unemployment, earnings and absence. Chapter One: Unemployment Stigma investigates the implications of an occupational hierarchy on labour market behaviour. The ideas developed are applied, firstly, to a model of the wage curve where it is shown that the relationship between unemployment and pay may be upward slopping over some range; and secondly, to a non-shirking model of efficiency wages where the potential for multiple labour market equilibria is highlighted. Chapter Two: The Economics of Absence investigates the relatively neglected issue of worker absence. The Chapter reviews and offers some perspective to existing studies of absence, develops a theoretical model of absence that incorporates both the supply and demand aspects of the employment relation, and sets out an empirical analysis of the relationship between absence and labour supply. Chapter Three: Absence and Profit Sharing explores the relationship between employee sharing and worker absence using data from a panel of 127 French firms over the period 1981-1991. The results suggest that both profit sharing and employee share ownership schemes are associated with significantly lower absence, the extent of the decline depending crucially upon whether or not the schemes operate exclusively of one another. An interesting question also emerges concerning the relationship between contractual flexibility and absence behaviour, the empirical analysis suggesting that a more widespread use of part-time contracts may act to reduce the incidence of absence in firms operating profit sharing schemes. Chapter Four: U.K. Unemployment profiles the incidence of unemployment in the U.K. over the period 1985-91 by quantifying the differential probabilities of unemployment faced by particular groups within the population. The results indicate that, even after controlling for a plethora of demographic characteristics, regional disparities in unemployment risk are prevalent. Chapter Five: Trade and Trade Unions examines the effects of international trade on the employment and earnings prospects of a sample of U.K. workers. The Chapter develops a model of international oligopoly with generally unionised labour markets which suggests that an increased exposure to trade is more likely to impact negatively upon the wage (employment) prospects of workers the greater (lesser) the degree of union bargaining power to which they are subservient. The empirical analysis in the Chapter offers substantive support for this proposition.

This portfolio of work examines various aspects of the UK labour market and it specialises on the construction sector. It draws on research studies that have been published over a thirty year period. From this wide portfolio of material, some six studies have been selected for a critical analysis. These papers are held to be representative of my research in this subject area. Section 2 of the critical overview provides a short background to the full body of research and places the publications that appear in the References in chronological context. This section also draws attention to the influence of external labour market organisations in providing direction for the various research studies. Section '3 discusses the two papers that are fully reproduced in Annex A. These studies were'concerned with modelling labour supply and demand for the overall UK economy. Both papers use applied econometrics to model trends in key employment variables. Section 4 analyses the research monograph that is reproduced in Annex B. This study attempted to produce an employment forecasting model for the UK construction sector. This work involved extensive data collation, not only the compilation of time series observations but also the assembly of qualitative information from labour market practitioners in the industry. Modelling was carried out at several levels of disaggregation. Section 5 presents three more recent papers that are reproduced in Annex C. These studies demonstrate different research approaches to the econometric analyses that lie at the heart of the earlier work. The emphasis on these later papers is towards survey research and critical appraisal. Use is made of interview questionnaire data in one of these studies, whilst another relies on detailed analysis of official published statistics. All relate to the UK construction labour market. The brief conclusions testify to the wide range of analytical skills that has been applied in the assembled papers. It is maintained that collectively this body of work has made a significant contribution to an understanding of the UK labour market and especially to knowledge of employment in the construction sector.

The positive impact of higher education institutions (HEI) on local economies has been long acknowledged, but it has generally been evaluated by using regional multipliers or input-output techniques, which are static in nature and more focused on short-term effects. This study tried to give a more complete and dynamic account of how HEI are affecting the local economies by incorporating into the analysis the role of human capital and interregional migration. My analysis is based on micro- econometric data on around 800,000 British students graduating between the academic years 1996-97 and 1999-00. In order to analyse the data I employ dichotomous, multinomial, and conditional logit models, which investigate how the characteristics of the individuals, the institutions, and the regions together determine graduate migration behaviour. Most of my results on the determinants of student migration were in line with the expectations of the traditional migration research although some surprising results were also revealed. One of the most interesting results is the different attitude of men and women towards migration to study and migration to work. Another important result is the effect of the final degree classification on graduate migration. In the last part of the thesis we used the knowledge developed on student and graduate migration to study the relationship between innovation and human capital flows. Given the nature of the problem, we move away from a micro-econometric framework to use simultaneous equation models, which better account for the feedback mechanisms between the two phenomena under investigation. The results show that the primary role of the university system appears to be as acting as a conduit for bringing potential high quality undergraduate human capital into a region. If the region is already economically buoyant, many of these migrants will remain in the university region for employment after graduation, subsequently contributing to the region's innovative performance. The migration effects of embodied human capital appear far more important than informal university-industry spillovers as an explanation of regional learning effects.

In this thesis we demonstrate how important the existence of a pool of qualified workers within the local labour market is for the process of job creation and the location of economic activity. In chapter 1 the basic theoretical model is developed. Using a matching model it is shown that Job Creation will be higher if firms have a larger pool of qualified workers from which to fill their vacancies, since their expected profits per vacancy opened will be greater. At the same time, individuals have a higher incentive to invest in education if job creation is higher. The interaction between these two forces generates a pecuniary externality in the labour market. In chapter 2, we extend the theoretical model by considering two regions and the possibility of migration. In equilibrium, areas where the pool of qualified workers is larger attract more jobs and skilled workers. Job Creation will be higher in such areas since firms located there are able to find a more qualified worker with greater ease. At the same time, given the sunk cost of moving, only the most skilled workers will find migration to these areas worthwhile. The interaction between these two forces generates a pecuniary externality that encourages concentration of economic activity in areas with a larger pool of qualified workers. In chapter 3 we estimate the effect of the pecuniary education externality on the process of matching in the UK regional labour market in the 1990s. We find a significant effect of the average level of education in a region on the conditional probability of finding a job in that region using a duration model. This effect is positive for skilled occupations and negative for unskilled ones. Finally, in Chapter 4 we estimate the effect of the education externality on the individual decision to stay-on in education. We find that the share of the region's working age population with degree has a positive and significant effect on the education decisions of sixteen and eighteen year-olds, while the share with high vocational has a similar effect for seventeen year-olds.

This thesis considers the linkages between the age composition of the population and the incidence of unemployment. The first two chapters investigate the macro implications of demographic change, the second two focus on the age-variation in experience of unemployment at the micro level. It is well known both that the probability of being unemployed varies with age and that, thanks to large fluctuations in the birth rate over the last half century, the age composition of the labour force has undergone profound change. We employ a shift-share analysis to identify the role played by shifts in the composition of the labour force in determining the behaviour of the unemployment rate. If workers acquire human capital as they age, demographic change implies a shift in the distribution of skills across the workforce. Drawing on an established theoretical model, we re-examine the evolving mismatch between the demand for, and the supply of, different skills in the labour market, and the role it played in determining the aggregate unemployment rate over the recent past. If we want to understand the extent to which it is the same individuals who are unemployed through time, we have to look beyond the aggregate unemployment rate. We therefore focus on the distribution of unemployment across individuals - and in particular across age groups - when we aggregate across their separate spells, and the implications a concentration of unemployment on a small number of individuals might have for wage setting behaviour. If past experiences of unemployment scar individuals - increasing their probability of being unemployed in the future - this might explain the persistence in experiences of unemployment we observe. Drawing upon the survival analysis literature, we investigate a particular variant of the scarring hypothesis - that past experiences of unemployment significantly reduce the conditional probability of escaping current spells.

This thesis provides a quantitative investigation on issues of labour market divisions, focusing on the UK case between 1991 and 2010. Existing literatures offer a sophisticated account of the theoretical understanding of divisions within labour markets across different welfare states. Especially, amongst others, the most recent literature, termed dualization, has highlighted a dualistic pattern of division not only within the labour market but also in other spheres such as social security settings in many advanced industrial economies. It also emphasises the cross-national variation in the divisions of labour markets. Yet, the existing researches do have their limitations, particularly by the extent to which many studies rely on pre-defined patterns and features of divisions. In other words, rarely do these studies examine how and to what extent labour markets are divided. Rather, they assume that a specific type of division exists in a market and this assumption is applied to measure the extent to which this division can be observed. Thus, this thesis aims to overcome these limitations by investigating distinctive patterns and features of the divided labour market as well as matters concerning the positional stability of individuals of the UK's employed population over the past two decades using advanced quantitative methods (latent class, latent and regression modelling). By investigating the country in which dualization is deemed to be less likely to occur due to its liberal economic structures, the thesis also engages with the role of labour market institutions and their policies. Results suggest that the UK labour market has been divided over the last 20 years and many socio-demographic indicators, such as gender, age and education, are attributed to the segmentation of labour force. This supports the theoretical literature on labour market divisions in that there are clear distinctions between those who are insiders and those who are not and that there are the contrasting demographics in different labour market segments. However, the clearest deviation from the existing literature is that the main characteristics that divide the groups in the UK labour market are not contract types but rather income levels, occupational profile, and social security benefits stemming from employment. Simultaneously, the divided labour groups indicated have relatively strong levels of positional stability between 1991 and 2010. Such an analytical outcome differs from previous theories' argument that the UK labour market has a flexible labour market structure which promotes frequent mobility amongst the labour force. In particular, the strong positional stability of the "insiders" regardless of different time points and scales was rather distinctive. Furthermore, of various individual-level indicators, trade unions have shown to be one of the core driving factors to reinforce the divisions in the UK labour market alongside the socio-demographic factors despite a radical reduction within their size and power over recent decades. Therefore, overall findings appear to be consistent with the broader argument of the existing literature on labour market divisions, that the "divides" do exist in the UK labour market. However, it provides less support for the recent suggestion that a specific pattern of division and its characteristics operate neatly across different countries. Such a result highlights the importance of further empirical investigations in order to understand the cross-national variations of labour market divisions.

This thesis investigates the relationship between labour market statuses and well-being in the UK working age population, and the moderating role of the Great Recession. Research on the relationship between labour market statuses and well-being outcomes identifies negative associations with unemployment and economic inactivity. These findings are typically presented as independent of macroeconomic conditions, but to what extent does this assumption hold? The central proposition of this thesis, is that economic crises moderate the way in which labour market statuses affect well-being, thereby changing the value of statuses, not just their prevalence. The main research question addressed is ‘for the UK working age population, to what extent did labour market and employment statuses contribute to the greater or lesser effects of the economic crisis (2007/8–2011) on well-being, compared to the pre-recession ‘boom’ period (2003/4–2006/7)?’I make use of a national panel data series from the British Household Panel Survey and Understanding Society. Firstly, after critiquing the reliance on subjective well-being (SWB) measures, confirmatory factor analysis is used to develop a measure of positive psychological health, representing a single dimension of well-being. This is then compared to a measure of SWB in a series of latent growth models to investigate individual trajectories over the study period. Secondly, multilevel models are used to estimate the relationship between five labour market and employment statuses and positive psychological health, comparing the pre-recession and recession periods. Finally, a dynamic structural equation modelling approach is used to investigate selection and causation in the relationship between labour market status and positive psychological health. Aggregate positive psychological health was associated with a recession period decline, in contrast to SWB which remained stable. Labour market statuses were found to moderate the impact of recession. People who were economically inactive were associated with the largest declines in positive psychological health during the recession period, compared to the pre-recession period, followed by those in standard employment. In contrast, the relationship between non-standard employment and unemployment and positive psychological health remained constant over time. Finally, despite evidence of selection into labour market statuses, the findings show a strong causal impact of statuses on positive psychological health. The findings provide a different take on those hardest hit by recession, showing that some of the most vulnerable to low psychological health were most exposed to the impact of recession by virtue of their labour market status. The protective value of standard employment was also diminished relatively. Evidence in favour of a causal interpretation suggests policy makers should use employment and welfare policy to prevent an accumulation of welfare issues.