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A quality-adjusted labour input series for the United Kingdom (1975-2002)

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  • Venetia Bell
  • Pablo Burriel-Llombart
  • Jerry Jones

Abstract

In this paper, annual indices of labour input adjusted for the education, age and gender distributions of the UK workforce are presented for the period 1975-2002. These measures show that improvement in labour quality, as proxied by education, age and gender, has added on average 0.67 percentage points per year to the growth rate in total labour input. Changes in the education distribution more than account for the improvement in labour quality, adding 0.68 percentage points per annum. Changes in the age distribution have made a much smaller contribution, adding only 0.11 percentage points to the growth rate. The rise in female participation has had a small negative effect of 0.08 percentage points, as women have had a preference for part-time work, which tends to be paid less per hour than full-time jobs. Using this evidence, the key finding of this paper is that a large proportion of growth that is usually attributed to TFP (total factor productivity) growth can be accounted for by an improvement in the quality of labour input. This result has no implications for the measurement of UK GDP growth from 1975-2002, but it does help to identify more accurately the sources of that growth.

Suggested Citation

  • Venetia Bell & Pablo Burriel-Llombart & Jerry Jones, 2005. "A quality-adjusted labour input series for the United Kingdom (1975-2002)," Bank of England working papers 280, Bank of England.
    • Handle: RePEc:boe:boeewp:280
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    File URL: http://www.bankofengland.co.uk/research/Documents/workingpapers/2005/WP280.pdf
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    References listed on IDEAS

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    2. David Card & Richard B. Freeman, 2004. "What Have Two Decades of British Economic Reform Delivered?," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980–2000, pages 9-62, National Bureau of Economic Research, Inc.
    3. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2004. "The Case of the Missing Productivity Growth, or Does Information Technology Explain Why Productivity Accelerated in the United States but Not in the United Kingdom?," NBER Chapters, in: NBER Macroeconomics Annual 2003, Volume 18, pages 9-82, National Bureau of Economic Research, Inc.
    4. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555, Elsevier.
    5. Paula Barnes & Sharon Kennard, 2002. "Skill and Australia's productivity surge," Labor and Demography 0210001, University Library of Munich, Germany.
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    Cited by:

    1. Nicholas Crafts, 2021. "The Sources Of British Economic Growth Since The Industrial Revolution: Not The Same Old Story," Journal of Economic Surveys, Wiley Blackwell, vol. 35(3), pages 697-709, July.
    2. Thomas Bolli & Mathias Zurlinden, 2012. "Measurement of labour quality growth caused by unobservable characteristics," Applied Economics, Taylor & Francis Journals, vol. 44(18), pages 2297-2308, June.
    3. Oulton, Nicholas, 2012. "Long term implications of the ICT revolution: Applying the lessons of growth theory and growth accounting," Economic Modelling, Elsevier, vol. 29(5), pages 1722-1736.
    4. Mauro Giorgio Marrano & Jonathan Haskel & Gavin Wallis, 2009. "What Happened To The Knowledge Economy? Ict, Intangible Investment, And Britain'S Productivity Record Revisited," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 686-716, September.
    5. McNamara, Paul E. & Ulimwengu, John M. & Leonard, Kenneth L., 2010. "Do health investments improve agricultural productivity? Lessons from agricultural household and health research," IFPRI discussion papers 1012, International Food Policy Research Institute (IFPRI).
    6. Oulton, Nicholas, 2013. "Medium and long run prospects for UK growth in the aftermathof the financial crisis," LSE Research Online Documents on Economics 58239, London School of Economics and Political Science, LSE Library.
    7. Oulton, Nicholas, 2004. "A statistical framework for the analysis of productivity and sustainable development," LSE Research Online Documents on Economics 19963, London School of Economics and Political Science, LSE Library.
    8. Thomas Bolli & Mathias Zurlinden, 2009. "Measuring Growth of Labor Quality and the Quality-Adjusted Unemployment Rate in Switzerland," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 55(2), pages 121-145.
    9. Wissner, Matthias, 2009. "IKT, Wachstum und Produktivität in der Energiewirtschaft: Auf dem Weg zum Smart Grid," WIK Discussion Papers 320, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    10. Hervé Boulhol & Laure Turner, 2009. "Employment-Productivity Trade-off and Labour Composition," OECD Economics Department Working Papers 698, OECD Publishing.

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