Labour reallocation explains productivity puzzle – BoE paper


Movements of workers into new jobs can explain the productivity weakness in the UK since 2008, according to research published by the Bank of England.

In the staff working paper, BoE economist Patrick Schneider employs what he calls a “novel decomposition framework”, which breaks the productivity puzzle into factors relating to firms’ characteristics and those relating to movements of workers between these firms.

This methodological approach helps to overcome the demands of other methods used

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