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Rising Labor Productivity during the 2008-9 Recession

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  • Casey B. Mulligan

Abstract

During the recession of 2008-9, labor hours fell sharply, while wages and output per hour rose. Some, but not all, of the productivity and wage increase can be attributed to changing quality of the workforce. The rest of the increase appears to be due to increases in production inputs other than labor hours. All of these findings, plus the drop in consumer expenditure, are consistent with the hypothesis that labor market "distortions" were increasing during the recession and have remained in place during the slow "recovery." Producers appear to be trying to continue production with less labor, rather than cutting labor hours as a means of cutting output.

Suggested Citation

  • Casey B. Mulligan, 2011. "Rising Labor Productivity during the 2008-9 Recession," NBER Working Papers 17584, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17584 Note: EFG PE PR
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    Cited by:

    1. Michael C. Burda & Daniel S. Hamermesh & Jay Stewart, 2013. "Cyclical Variation in Labor Hours and Productivity Using the ATUS," American Economic Review, American Economic Association, vol. 103(3), pages 99-104, May.
    2. Ellen R. McGrattan & Edward C. Prescott, 2012. "The Labor Productivity Puzzle," Book Chapters,in: Lee E. Ohanian & John B. Taylor & Ian J. Wright (ed.), Government Policies and the Delayed Economic Recovery, chapter 6 Hoover Institution, Stanford University.
    3. Jesse Rothstein, 2012. "The Labor Market Four Years into the Crisis: Assessing Structural Explanations," ILR Review, Cornell University, ILR School, vol. 65(3), pages 467-500, July.
    4. Casey B. Mulligan, 2012. "Do Welfare Policies Matter for Labor Market Aggregates? Quantifying Safety Net Work Incentives since 2007," NBER Working Papers 18088, National Bureau of Economic Research, Inc.
    5. Casey B. Mulligan, 2011. "The Expanding Social Safety Net," NBER Working Papers 17654, National Bureau of Economic Research, Inc.

    More about this item

    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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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