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POID Research

Tackling the UK's productivity puzzles

Team Leaders: Ralf Martin, Anna Valero, and John Van Reenen

The UK is a particularly stark example of global productivity problems with labour productivity in early 2022 over a fifth below its pre-financial crisis trends. Unsurprisingly, real wages have followed productivity and are now at approximately the same level as they were before the financial crisis.

UK Labour Productivity would have been 26% higher on pre-Financial Crisis trends

Source: ONS Output per hour worked, release date 7 July 2022. Table 32. Quarterly output per hour worked whole economy chained volume measure (CVM) index (2008 Q2= 100). Note: predicted value after Q2 2008 is the dashed line calculated assuming a historical average growth rate of 2.1%.

Undertaken work

Several projects are trying to look at this including improved measurement of intangible capital in general (e.g. Jonathan Haskel's Spintech project) and patenting in particular (PatentCity)

Example papers