Working Hard in the Wrong Place: A Mismatch-Based Explanation to the UK Productivity Puzzle

Christina Patterson (), Aysegul Sahin, Giorgio Topa and Giovanni L. Violante ()
Additional contact information
Christina Patterson: University of Chicago Booth School of Business
Giovanni L. Violante: Princeton University

No 9629, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The UK experienced an unusually prolonged stagnation in labor productivity in the aftermath of the Great Recession. This paper analyzes the role of sectoral labor misallocation in accounting for this "productivity puzzle." If jobseekers disproportionately search for jobs in sectors where productivity is relatively low, hires are concentrated in the wrong sectors, and the post-recession recovery in aggregate productivity can be slow. Our calculations suggest that, quantified at the level of three-digit occupations, this mechanism can explain up to two thirds of the deviations from trend-growth in UK labor productivity since 2007.

Keywords: productivity; misallocation (search for similar items in EconPapers)
JEL-codes: E24 E32 J24 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2016-01
New Economics Papers: this item is included in nep-eff, nep-lab, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Published - published in: European Economic Review, 2016, 84, 42-56

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Journal Article: Working hard in the wrong place: A mismatch-based explanation to the UK productivity puzzle (2016)
Working Paper: Working Hard in the Wrong Place: A Mismatch-Based Explanation to the UK Productivity Puzzle (2016)
Working Paper: Working hard in the wrong place: a mismatch-based explanation to the UK productivity puzzle (2016)
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