Rising Labor Productivity During the 2008-9 Recession

46 Pages Posted: 15 Nov 2011 Last revised: 18 Nov 2011

See all articles by Casey B. Mulligan

Casey B. Mulligan

University of Chicago; National Bureau of Economic Research (NBER)

Date Written: November 2011

Abstract

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.

Suggested Citation

Mulligan, Casey B., Rising Labor Productivity During the 2008-9 Recession (November 2011). NBER Working Paper No. w17584. Available at SSRN: https://ssrn.com/abstract=1960131

Casey B. Mulligan (Contact Author)

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