Working hard in the wrong place

A mismatch-based explanation to the UK productivity puzzle

Christina Patterson, Ayşegül Şahin, Giorgio Topa, Giovanni L. Violante

    Research output: Contribution to journalArticle

    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.

    Original languageEnglish (US)
    Pages (from-to)42-56
    Number of pages15
    JournalEuropean Economic Review
    Volume84
    DOIs
    StatePublished - May 1 2016

    Fingerprint

    Productivity
    Labour productivity
    Mismatch
    Stagnation
    Aggregate productivity
    Misallocation
    Deviation
    Great Recession
    Labor
    Recession

    Keywords

    • Business cycles
    • Mismatch
    • Productivity

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Finance

    Cite this

    Working hard in the wrong place : A mismatch-based explanation to the UK productivity puzzle. / Patterson, Christina; Şahin, Ayşegül; Topa, Giorgio; Violante, Giovanni L.

    In: European Economic Review, Vol. 84, 01.05.2016, p. 42-56.

    Research output: Contribution to journalArticle

    Patterson, Christina ; Şahin, Ayşegül ; Topa, Giorgio ; Violante, Giovanni L. / Working hard in the wrong place : A mismatch-based explanation to the UK productivity puzzle. In: European Economic Review. 2016 ; Vol. 84. pp. 42-56.
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