UK productivity growth at its lowest since World War II

The UK’s weak productivity growth in the last seven years is unprecedented in the post-war period, according to the country’s Office for National Statistics (ONS).

The latest ONS figures show that the UK’s labor productivity fell by 0.2% in the final quarter of 2014. Across the year as a whole, productivity was virtually unchanged compared to 2013, and slightly lower than 2007, before the start of the recession.

Britain’s economy is emerging as a major issue in the general election to be held on May 7. In the latest survey published by the Centre for Macroeconomics (CFM), two-thirds of leading UK economists disagreed with the proposition that the outgoing coalition government’s austerity program has had a positive effect on employment and GDP.

Conversely, the Telegraph newspaper has published a letter from 100 company executives warning that a win for the opposition Labour Party would threaten the country’s economic recovery.

IZA World of Labor author Magnus Henrekson has written on how labor market institutions affect job creation and productivity growth. He says that “Growth-favoring labor market institutions include portable pension plans and other job tenure rights, health insurance untied to the current employer, individualized wage-setting, and public income insurance systems that encourage mobility and risk-taking.”

Elsewhere, in his article on the effect of international activity on firm performance, Joachim Wagner writes that lowering barriers to the international division of labor is essential to any pro-growth policy.

Read more here.

Related articles:
How labor market institutions affect job creation and productivity growth, by Magnus Henrekson
Effect of international activity on firm performance, by Joachim Wagner