This paper is concerned with measuring the true impact of certain human capital variables on an individual's occupational position. The particular variables which are analysed are training, qualifications and spells of sickness and unemployment. The longitudinal nature of the data enables us to control for all relevant individual attributes which remain fixed over the period of the sample. This is vitally important because these attributes are strongly correlated with the variables of interest and would seriously corrupt estimates derived from a single cross-section. A method of generating consistent estimates (as N → ∞, T fixed) for a dynamic model with fixed effects is also illustrated.

Journal Article Uncertainty and Lags in the Investment Decisions of Firms Get access Stephen Nickell Stephen Nickell E.N.S.A.E., Paris, and London School of Economics Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 2, June 1977, Pages 249–263, https://doi.org/10.2307/2297065 Published: 01 June 1977

Journal Article On the Role of Expectations in the Pure Theory of Investment Get access Stephen Nickell Stephen Nickell London School of Economics Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 41, Issue 1, January 1974, Pages 1–19, https://doi.org/10.2307/2296395 Published: 01 January 1974

This paper derives, and then estimates, a model of employment where unions and firms bargain over wages and possibly employment, and efficiency wage considerations may be important. It illustrates the difficulties associated in interpreting many existing attempts to discriminate between alternative models. The results (based on over 200 U.K. firms) suggest that employment is negatively related to the firm's own wage and the change in the own wage relative to outside opportunities. The latter may be an efficiency wage effect. Various financial factors are also seen to have a significant effect on employment.

In this paper, we first present a competitive macroeconomic model of an open economy which is suitable for estimation and contrast this with a non-competitive model. We then derive unemployment equations from the various models and estimate them over annual data from 1948–1979. We draw the following conclusions. (i) The competitive model of the labour market does not fit the facts. (ii) The non-competitive model generates an equation for the constant inflation rate of unemployment which reveals how, at certain times such as the mid 1970s, a combination of factors conspired to raise this level forcing the government into a deflationary stance to prevent inflation rising drastically. (iii) A number of factors have raised the level of unemployment in a secular fashion since the war, in particular the increase in the variation of relative prices, the increase in the benefit to income ratio, the introduction of employment protection legislation and the rise in the intersectoral shifts of the labour force.