Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245671 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14620
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
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.
Subjects: 
productivity
labour supply
capital deepening
JEL: 
J11
J21
D24
Document Type: 
Working Paper

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