A Study in Structural Change: Relative Earnings in Wales Since the 1970s

The Welsh economy has undergone rapid structural change in recent years. This paper uses data from the New Earnings Survey to examine how earnings in Wales changed relative to those of Great Britain between 1975 and 1994. There are five main findings. First, earnings of workers in Wales have declined relative to those in Great Britain. Second, the shift away from full-time men has been an important factor in the fall in average relative earnings. Third, the decline in the relative earnings of full-time men is mostly explained by falling relative earnings in construction, distribution, and transport, as well as the failure of workers in banking and financial services in Wales to keep up with their counterparts in Great Britain. Fourth, the shift in full-time employment to health, education and other services has tended to support relative earnings. Fifth, the decline in full-time men`s earnings seem to be an equilibrium phenomenon that will not naturally reverse itself.