productivity

Understanding regional economic performance and resilience in the UK: trends since the global financial crisis

We investigate economic resilience of UK regions before, during and after the 2007/8 global financial crisis. We date business cycle turning points in real output, employment and productivity to assess the resilience dimensions of resistance, recovery and renewal and rank the economic resilience of regions in a resilience scorecard. Our empirical results reveal that the business cycle in productivity has not returned to its pre-recession peak level for Yorkshire and the Humber and the employment level has not recovered in Scotland.

Below the Aggregate: A Sectoral Account of the UK Productivity Puzzle

We analyse new industry-level data to re-examine the UK productivity puzzle. We carry out an accounting exercise that allows us to distinguish general macroeconomic patterns from sector trends and idiosyncrasies, providing a roadmap for anyone interested in explaining the puzzle. We focus on the UK market sector. Average annual labour productivity growth was 2.5 percentage points lower during the period 2011-2015 than in the decade before the financial crisis that began in 2007.

Cloud computing, cross-border data flows and new challenges for measurement in economics

When economists talk about ‘measurement’ they tend to refer to metrics that can capture changes in quantity, quality and distribution of goods and services. In this paper we argue that the digital transformation of the economy, particularly the rise of cloud computing as a general-purpose technology, can pose serious challenges to traditional concepts and practices of economic measurement. In the first part we show how quality-adjusted prices of cloud services have been falling rapidly over the past decade, which is currently not captured by the deflators used in official statistics.

Structural reforms in Spain

The Spanish economy has been growing at over 3% since 2015, above the average for the EU and the euro area. Unemployment, although still 10 percentage points above the EU average, has fallen from a high of 26.1% in 2013 to 17.2% in 2017. Interest rates are at historical lows thanks to the expansive monetary policy of the European Central Bank. The public deficit has fallen substantially in recent years and is close to, but still above, 3%, and there has been a current account surplus for several years. Therefore, Spain’s macroeconomic situation appears healthy.

Persistent productivity failure in the UK: is the EU really to blame?

On average, UK productivity performance in the decades leading up to the financial crisis was quite disappointing. Joining the EU was not to blame. Indeed, EU membership, which was an integral part of the Thatcher reform programme, had a significant positive impact. Over the long run, UK supply-side policies have been badly designed in various different ways. These design faults have not been the result of constraints imposed by EU membership but rather the consequence of domestic government failure.

What is holding back UK productivity? Lessons from decades of measurement

UK labour productivity is significantly lower than that of many other similarly advanced economies and has been so for decades, with negative implications for UK living standards. To make matters worse, during the last ten years labour productivity growth has stalled in most industrialised countries, and particularly in the UK. This has led to a renewed policy focus on productivity growth, as evidenced by successive government productivity plans and efforts to re-invigorate industrial strategy.

Productivity in the UK’s low-wage industries

Concern about the UK’s productivity problem has become widespread. Fixing the UK’s productivity problem requires action for the lagging parts of the economy – low pay sectors such as retail and hospitality, the long tail of low-productivity firms, and the five million individuals in the UK lacking basic functional literacy or numeracy.

This briefing examines the productivity gap between Britain and its competitors. It is published alongside two other pieces of research commissioned by the Joseph Rowntree Foundation:

The Impact of Management Practices on SME Performance

We examine the impact of management practices on firm performance among SMEs in Britain over the period 2011-2014, using a unique dataset which links survey data on management practices with firm performance data from the UK’s official business register.

Union Density, Productivity, and Wages

We exploit tax-induced exogenous variance in the price of union membership to identify the effects of changes in firm union density on firm productivity and wages in the population of Norwegian firms over the period 2001 to 2012. Increases in union density lead to substantial increases in firm productivity and wages having accounted for the potential endogeneity of unionization. The wage effect is larger in more productive firms, consistent with rent-sharing models.

Mutual gains? Is there a role for employee engagement in the modern workplace?

I examine the history of employee engagement and how it has been characterised by thinkers in sociology, psychology, management and economics.  I suggest that, while employers may choose to invest in employee engagement, there are alternative management strategies that may be profit-maximising.

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