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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 2020 over a fifth below its pre-financial crisis trends. Unsurprisingly, real wages followed productivity and remained below their levels in 2007 in 2020.

UK Labour Productivity would have been 30% higher on pre-Financial Crisis trends

Notes: Whole Economy GDP per hour worked, seasonally adjusted. ONS Statistical bulletin, Labour Productivity with last available quarter Q2 2020, release date 4 November 2020. We normalize to Q2 2008 = 100. Predicted value after Q2 2008 is the dashed line calculated assuming a historical average growth rate of 2.2%.

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