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

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  • Violante, Giovanni
  • Topa, Giorgio
  • Sahin, Aysegul
  • Patterson, Christina

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.

Suggested Citation

  • Violante, Giovanni & Topa, Giorgio & Sahin, Aysegul & Patterson, Christina, 2016. "Working Hard in the Wrong Place: A Mismatch-Based Explanation to the UK Productivity Puzzle," CEPR Discussion Papers 11055, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11055
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    Cited by:

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    2. Monica Costa Dias & Ella Johnson-Watts & Robert Joyce & Fabien Postel-Vinay & Peter Spittal & Xiaowei Xu, 2021. "Worker Mobility and Labour Market Opportunities," Bristol Economics Discussion Papers 21/753, School of Economics, University of Bristol, UK.
    3. Ian Goldin & Pantelis Koutroumpis & François Lafond & Julian Winkler, 2024. "Why Is Productivity Slowing Down?," Journal of Economic Literature, American Economic Association, vol. 62(1), pages 196-268, March.
    4. Andreas Teichgraber & John Van Reenen, 2021. "Have Productivity and Pay Decoupled in the UK?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 41, pages 31-60, Fall.
    5. Ms. Era Dabla-Norris & Carlo Pizzinelli & Jay Rappaport, 2019. "Job Polarization and the Declining Fortunes of the Young: Evidence from the United Kingdom," IMF Working Papers 2019/216, International Monetary Fund.
    6. Gyetvai, Attila & Zhu, Maria, 2021. "Coworker Networks and the Role of Occupations in Job Finding," IZA Discussion Papers 14615, Institute of Labor Economics (IZA).
    7. Altmann, Steffen & Mahlstedt, Robert & Rattenborg, Malte Jacob & Sebald, Alexander, 2023. "Which Occupations Do Unemployed Workers Target? Insights from Online Job Search Profiles," IZA Discussion Papers 16696, Institute of Labor Economics (IZA).
    8. Suguru Otani, 2024. "Nonparametric Estimation of Matching Efficiency and Mismatch in Labor Markets via Public Employment Security Offices in Japan, 1972-2024," Papers 2407.20931, arXiv.org, revised Sep 2024.
    9. Tara Sinclair & Martha Gimbel, 2020. "Mismatch in Online Job Search," Working Papers 2020-1, The George Washington University, Institute for International Economic Policy.
    10. Dolado, Juan J & Lalé, Etienne & Turon, Hélène, 2021. "Zero-hours Contracts in a Frictional Labor Market," CEPR Discussion Papers 16843, C.E.P.R. Discussion Papers.
    11. Claudia Macaluso, 2023. "Skill Remoteness and Post-Layoff Labor Market Outcomes," CESifo Working Paper Series 10845, CESifo.
    12. Jung, Philip & Korfmann, Philipp & Preugschat, Edgar, 2023. "Optimal regional labor market policies," European Economic Review, Elsevier, vol. 152(C).
    13. Arthur Turrell & Bradley Speigner & Jyldyz Djumalieva & David Copple & James Thurgood, 2019. "Transforming Naturally Occurring Text Data into Economic Statistics: The Case of Online Job Vacancy Postings," NBER Chapters, in: Big Data for Twenty-First-Century Economic Statistics, pages 173-207, National Bureau of Economic Research, Inc.
    14. Claudia Macaluso, 2017. "Skill Remoteness and Post-layoff Labor Market Outcomes," 2017 Meeting Papers 569, Society for Economic Dynamics.
    15. Kircher, Philipp A.T., 2020. "Search design and online job search – new avenues for applied and experimental research," Labour Economics, Elsevier, vol. 64(C).
    16. Turrell, Arthur & Speigner, Bradley & Copple, David & Djumalieva, Jyldyz & Thurgood, James, 2021. "Is the UK’s productivity puzzle mostly driven by occupational mismatch? An analysis using big data on job vacancies," Labour Economics, Elsevier, vol. 71(C).
    17. Michelle Rendall & Satoshi Tanaka & Yi Zhang, "undated". "College Majors and Skill Mismatch in Labour," MRG Discussion Paper Series 4924, School of Economics, University of Queensland, Australia.
    18. Pizzinelli, Carlo & Shibata, Ippei, 2023. "Has COVID-19 induced labor market mismatch? Evidence from the US and the UK," Labour Economics, Elsevier, vol. 81(C).
    19. Altmann, Steffen & Glenny, Anita Marie & Mahlstedt, Robert & Sebald, Alexander, 2022. "The Direct and Indirect Effects of Online Job Search Advice," IZA Discussion Papers 15830, Institute of Labor Economics (IZA).
    20. Galanakis, Yannis, 2020. "Female Human Capital Mismatch: An extension for the British public sector," GLO Discussion Paper Series 669, Global Labor Organization (GLO).
    21. Kyungho Song & Hyun Kim & Jisoo Cha & Taedong Lee, 2021. "Matching and Mismatching of Green Jobs: A Big Data Analysis of Job Recruiting and Searching," Sustainability, MDPI, vol. 13(7), pages 1-15, April.

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    More about this item

    Keywords

    Mismatch; Occupation; Productivity;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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