%X 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.
%O © 2014 Institute of Fiscal Studies. The Economic Journal published by John Wiley & Sons Ltd on behalf of the Royal Economic Society
This is an open access article under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by-nc-nd/3.0/), which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
%N 576
%J The Economic Journal
%I WILEY-BLACKWELL
%L discovery10159850
%D 2014
%T What Can Wages and Employment Tell Us about the UK's Productivity Puzzle?
%P 377-407
%A Richard Blundell
%A Claire Crawford
%A Wenchao Jin
%V 124