The UK Productivity Shortfall in an Era of Rising Labour Supply

Arbeitspapier

Labour productivity stagnated in the UK in the years between the financial crisis and the emergence of Covid-19. At the same time labour supply and employment grew strongly, driven primarily by net inward migration. While labour productivity should be independent of labour supplied in the long run, this need not be the case in the medium-run. Our evidence suggests that around one-fifth, or 4pp, of the 25 log point fall in productivity from its previous trend can be explained by increased labour supply, with idiosyncratic factors and a slowdown in TFP growth accounting for most of the shortfall.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 14620

Classification and Topics

• Classification: Wirtschaft ; Demographic Trends, Macroeconomic Effects, and Forecasts ; Labor Force and Employment, Size, and Structure ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
• Subject: productivity ; labour supply ; capital deepening

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Benito, Andrew ; Young, Garry
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/245671
• Last update: 10.03.2025, 11:44 AM CET