Recent rises in wages in the UK, US and Canada have been slower than would have been predicted by models based on past behaviour. During the 1980's the UK experienced the largest rises in the distribution of earnings. The dispersion between the pay of the top 10 per cent and the middle of the wage distribution rose significantly as did the dispersion between the middle and the bottom 10 per cent. The recent recession and recovery in the UK are far less regionally biased than in the 1980's. The most recent recession and upturn in the UK have been less regionally biased than the previous cycle of the early 1980's.
Unemployment now shows less regional variation in the UK than in many other countries.
The narrowing in regional dispersion is primarily due to a better employment performance in those regions which have been traditionally less favoured. This is to some extent due to the fact that the latest cycle has been less biased against manufacturing. However there does not appear to be much of a role for changes in the flexibility of labour supply at a regional level. The better jobs performance in high unemployment areas does not seem to have been prompted by lower wages. If anything there seems to be a positive correlation between employment and wage growth which suggests that the improvements have been demand led.