Tag Archives: Productivity

Skills matter: The changing workforce and the effects on pay and productivity

Matthew Corder

Pay and productivity growth over the past couple of years have remained weak despite a rapid fall in unemployment and robust GDP growth.  But these aggregate measures in the UK reflect the sum of a diverse range of individuals in the workforce.  Changes in the mix of that workforce, therefore, can affect pay and productivity growth.  Based on analysis of the determinants of individual workers’ wages, I estimate that changes in the mix of the workforce may account for about 1pp of the recent weakness in annual average pay growth relative to normal. Continue reading

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Filed under Macroeconomics, Monetary Policy