Gerhard Tintner, An Econometric Investigation of the British Labor Market (1950)

This conference-paper abstract within a meeting report presents estimates of static industrial labor demand and supply in Great Britain for 1920–1938. Tintner’s central question is whether employment and labor-force participation respond to real wages rather than independently to money wages and prices. The abstract moves from variables and estimation methods to homogeneity tests and elasticity estimates, distinguishing relatively definite demand findings from uncertain supply results.

The method of weighted regression is used to estimate the static demand and the static supply curve of labor in Great Britain during the period.

Demand is measured by industrial employment relative to the gross labor force; supply includes both employed and unemployed workers relative to that force. Tintner distinguishes wholesale prices, used in investigating demand, from the cost-of-living index relevant to supply. Confidence limits, investigation of multicollinearity, and linear tests of homogeneity supplement the regression estimates.

It appears that the demand function for industrial labor is probably homogeneous of zero degree in wages and prices (wholesale price index).

Zero-degree homogeneity implies that proportional changes in wages and prices leave demand unchanged: their ratio matters. Estimated demand elasticity is −0.4 without a time trend and −0.7 with one, making the estimated response sensitive to the inclusion of time.

It is not at all certain that there is any dependence of the supply of labor on wages and prices.

This qualification limits the supply findings. Tintner nevertheless reports apparent zero-degree homogeneity in wages and living costs, identifying its relevance to Keynesian discussion without elaborating the connection. Supply elasticity is estimated at −0.2 without a trend and −0.3 with one. The negative sign is singled out as interesting, but no mechanism is offered. The abstract’s contribution is thus a compact empirical test of wage–price relationships, with a clear warning against treating the supply estimates as securely established.