1. 1. These are calculated as the means of the semi-annual first differences in the logarithms of earnings and wages respectively, and expressed in annual rates by multiplying by two.
2. Wage Drift;Brown;Economica,1962
3. 3. From the end of the Second World War until April 1961, the Ministry of Labour undertook enquiries every two years into the extent of payment-by-results methods. These data reveal that, from approximately the beginning of our estimating period (in October 1951 to be exact) to the last survey in April 1961, the fraction of wage-earners who received at least part of their pay according to some sort of incentive payments scheme changed imperceptibly from 32 to 33 per cent. (These figures relate to manual workers employed in the same industries as those covered by the earnings data below, namely, manufacturing, construction, transport, public utilities, and mining other than coal.) The only comparable study since 1961 was conducted by the National Board for Prices and Incomes in December 1967 from which they conclude ‘…there is no clear evidence of any overall movement to, or away from, payments-by-results since the Ministry of Labour's 1961 enquiry’ (p. 8). Of course, these figures are aggregated over different industries and different classes of workers and this stability in the percentage of all workers on some form of payment-by-results conceals some interesting variation over time in particular sub-categories. See the discussion in National Board for Prices and Incomes, Payment by Results Systems, Report No. 65, Cmnd. 3627, H.M.S.O., London, 1968, Chapter 2.
4. 4. It is an approximate identity since σ is not, of course, the same for all categories of overtime hours. For instance, overtime hours worked during a weekday are normally paid at time-and-a-quarter, time-and-one-third, or time-and-one-half while for almost all Sunday work the rate is double time. Unfortunately, the data available to us do not distinguish between these different categories of overtime hours so we are obliged to work with a single value for σ.
5. 5. Suppose overtime is worked at the rate of time-and-one-half (σ= 1.5). At the aggregate level (Ct - Ht)/Ht never exceeds 0.10 in which case σ(Ct - Ht)/Ht < 0.15.