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Social Europe Journal:
The great British jobs and productivity mystery by Jo?o Paulo Pessoa, John Van Reenen

30 June 2014

The upshot of this is that the price of labour (wages) has fallen and the price of capital has increased, so firms have had incentives to substitute cheaper workers for more expensive machinery and buildings. And while this means employment is much higher than we would have otherwise have expected, it means that productivity has been depressed as a result of less investment per worker. In our recent study at the Centre for Economic Performance (CEP), we argue that once this is taken into account, productivity changes in the UK since 2008 are not so different to the picture in the 1980s and 1990s recessions (Pessoa and Van Reenen 2014).

This article was published in Social Europe Journal on June 30, 2014
Link to article here

Also in:
Business Spectator

Related Publications
The UK Productivity and Jobs Puzzle: Does the Answer Lie in Wage Flexibility?, Joao Paulo Pessoa and John Van Reenen, The Economic Journal, Volume 124, Issue 576, 433-452, May 2014
'The UK Productivity and Jobs Puzzle: Does the Answer Lie in Labour Market Flexibility?', Joao Paulo Pessoa and John Van Reenen, Centre for Economic Performance Special Paper No.31, June 2013

Related Links
Joao Paulo Pessoa webpage
John Van Reenen webpage
Productivity and Innovation Programme webpage

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