Follow us
Publications Commentary Research People Events News Resources and Videos About IFS
Home Research areas Investment, productivity and innovation Labour productivity and wages

Labour productivity and wages

Labour market productivity is thought by economists to be the key determinant of average living standards in the long run. While productivity growth, as measured by real output per worker, remained stable through the early 1980s and 1990s recessions, it collapsed during the late 2000s Great Recession, with employment holding up better than anticipated.

Understanding this 'productivity puzzle', and what drives labour market productivity more generally, is an important topic of research at the IFS. Key questions include the relative importance of changes in hours worked and hourly wages, and how characteristics such as firm size effects company-level labour productivity.

Selected highlights

Journal article
This article uses individual data on employment and wages to try to understand whether real wage flexibility can help shed light on the UK’s productivity puzzle.
Video clip
IFS director, Paul Johnson, talking about a special 'recession' edition of the IFS journal Fiscal Studies.
Book chapter
This paper discusses what we know about one of the standout features of the UK labour market since 2008: robust employment and weak earnings.


Contact IFS on 020 7291 4800 or

Helen Miller
Deputy Director
Jonathan Cribb
Associate Director