Downloads

r76.pdf
PDF | 883.89 KB
In 2008–09, the UK experienced its deepest recession since the Second World War. One notable feature of this recession was, however, the resilience of employment, which fell by just 2.1% at a time when GDP fell by 6.3%. This suggests that firms may have been trying to weather the recession by holding on to their workers and reducing their hours, rather than making them redundant. Such behaviour is sometimes thought to indicate ‘labour hoarding’.
This report uses business data to document what happened to a variety of indicators of labour hoarding, as well as investment and training, over the course of the 2008–09 recession. In particular, it shows how these patterns vary amongst different types of firms, including by size and coverage of the National Minimum Wage (NMW) (i.e. the proportion of workers who are paid at or below this level). The report is associated with the Low Pay Commission Report 2013 and is funded by the Low Pay Commission.Authors

Helen Simpson

Research Fellow University College London
Claire is a Research Fellow at IFS, working on the determinants and consequences of participation in childcare and education for parents and children.

Research Associate
Wenchao is an Assistant Professor at the University of Sussex and an IFS Research Associate.
Report details
- DOI
- 10.1920/re.ifs.2013.0076
- Publisher
- Institute for Fiscal Studies
Suggested citation
C, Crawford and W, Jin and H, Simpson. (2013). Firms' productivity, investment and training, what happened during the recession and how was it affected by the national minimum wage?. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/firms-productivity-investment-and-training-what-happened-during-recession-and-how-was (accessed: 22 May 2025).
More from IFS
Understand this issue

Drastic times need drastic action: breaking the 50-year tax taboo
Rachel Reeves should consider increasing the basic rate, just as Denis Healey did in 1975
14 April 2025

Sure Start’s wide-ranging and long-lasting benefits highlight the impact of integrated early years services
Over the long run, Sure Start’s financial benefits could be twice as high as its costs
22 May 2025

Why is the government reforming health-related benefits?
We discuss the government's welfare reforms aimed at helping sick and disabled people into work, and what the changes mean for health-related benefits
14 May 2025
Policy analysis

The short- and medium-term effects of Sure Start on children’s outcomes
An evaluation of Sure Start’s impacts on education, health, absences, special educational needs, crime and social care, plus a cost–benefit analysis.
22 May 2025

IFS ‘Be the Chancellor’ tool illustrates all-important choices at upcoming Spending Review
The 'Be the Chancellor' tool, built by IFS researchers in partnership with Nesta, illustrates key choices and fiscal challenges Rachel Reeves faces.
21 May 2025

Expanding winter fuel payment eligibility
In this comment we consider what options the government has to expand WFP eligibility
21 May 2025
Academic research

Market concentration and productivity: evidence from the UK
We measure product market concentration and business dynamism in the UK from 1997 to 2020 and study the relationship with productivity.
6 May 2025

Landfill tax and recycling
This paper provides new empirical evidence on the role of landfill taxes in reducing landfill waste and promoting recycling.
6 May 2025

Focal pricing constraints and pass-through of input cost changes
I show that the adoption and extent of focal pricing practices in an industry in general do not lower average pass-through of input cost changes.
2 May 2025