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Home Publications What can wages and employment tell us about the UK's productivity puzzle?

What can wages and employment tell us about the UK's productivity puzzle?

Journal article | Economic Journal

As in many European countries, labour productivity in the UK has been stagnant since the start of the Great Recession. This article uses individual data on employment and wages to try to understand whether real wage flexibility can help shed light on the UK’s productivity puzzle. It finds, perhaps unsurprisingly, that workforce composition cannot explain the reduction in wages and hence productivity that we observe, even compared to previous recessions; instead, real wages have fallen significantly within jobs this time round. Why? One possibility we investigate is that the labour supply in the UK is higher compared to previous recessions.

Find the working paper here.

Figure. Changes to UK output, employment and hours

Figure. Changes to UK output, employment and hours

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IFS Working Paper W13/11
This paper uses individual data on employment and wages to shed light on the UK’s productivity puzzle.
Presentation
Presentation to launch the Fiscal Studies Special Issue on the Microeconomic Consequences of the Great Recession
Journal article | Fiscal Studies, Vol. 34, No. 2, June 2013
From an economic point of view, the period since the recession that began in 2008 has been quite unlike any other period since at least the Second World War, including the periods after the recessions of the early 1980s and early 1990s. Indeed, the slowdown has lasted for longer, and its effects on ...