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Durham University

Research & business

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Publication details

Harris, R. & Moffat, J. (2017). The UK productivity puzzle, 2008–2012: evidence using plant-level estimates of total factor productivity. Oxford Economic Papers 69(3): 529-549.

Author(s) from Durham


This paper presents new information from plant-level data on the UK’s productivity performance since 2008 and considers whether a fall in the capital-labour ratio explains the UK’s productivity puzzle. The results show that, while both manufacturing and services experienced large declines in labour productivity post-2008, the UK’s poor TFP productivity performance is primarily a service sector and small-plant phenomenon. Most of the fall in TFP in services is accounted for by a large negative TFP shock in 2008–2012. By decomposing the change in average labour productivity, it is shown that declines in the intermediate inputs–labour (rather than the capital–labour) ratio and decreases in TFP were responsible for the fall in labour productivity.