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Rising Labor Productivity during the 2008-9 Recession

  • Casey B. Mulligan

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.

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File URL: http://www.nber.org/papers/w17584.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17584.

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Date of creation: Nov 2011
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Handle: RePEc:nbr:nberwo:17584
Note: EFG PE PR
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