Productivity, Wages and the Labour Market

Lead Research Organisation: Institute for Fiscal Studies
Department Name: IFS Research Team

Abstract

Since the 2008 financial crisis, the UK has witnessed weak economic growth and stagnant productivity. While employment remained high, many jobs offer little security or opportunities for training and progression. Self-employment, much of which is unstable and low paid, was the fastest growing form of employment between the early 2000s and the pandemic. And the best jobs have become highly clustered in small parts of the country. These trends risk creating barriers to successful careers and progression for talented people, with detrimental effects on productivity.

The aim of this project is to further understanding of the interactions between skills, jobs and career progression, their combined role in driving inequalities in economic outcomes and their consequences for productivity. A cross-cutting part of this agenda is to investigate the role of policy for tackling inequalities in work and promoting good jobs, earnings progression and productivity. We propose an ambitious programme of work that combines state of the art economic modelling, careful econometric methods, and the use of new and existing linked data from administrative and other sources, to provide much needed evidence in this area.

This project is made up of three large strands, each of which contains multiple projects within it.

The first strand of work will examine the role of jobs in developing the skills, careers and earnings of workers in the UK. Focussing on low-and medium-paid workers, we will identify the characteristics of jobs and firms in which less educated people succeed, with a focus on the particular skills these jobs need. We will examine the importance of employer-based training and of firms' characteristics for wage progression. We will look into how occupational structures change with the introduction of the National Living Wage.

The second strand of work will focus on the growing importance of self-employment and small business ownership in the UK. We will study the role of self-employment in developing the skills of workers; its importance in providing a source of insurance against unemployment shocks; and how self-employment can drive inequalities in income and access to employment rights. We will examine the transitions between employment, self-employment, and unemployment and how the tax system and other policy changes affect these transitions.

The final strand of work will study the role of the geographic distribution of industries and jobs for inequalities in careers and productivity. We will examine how the skills required by employers are matched to the skills of jobseekers, across the country and socio-economic groups. We will use these measures to examine how local labour market conditions affect career progression, in particular seeking to understand the effects on the careers of women, many of whom are unable to commute long distances for work. We will examine how local labour market difficulties caused by industrial change can have long term consequences on careers and productivity.

Brought together, the findings of this research programme will be crucial to inform the development of government policies that seek to boost employment, pay, and productivity, particularly for people with lower levels of education, from disadvantaged backgrounds, or in less prosperous parts of the country. We will engage with senior policy-makers throughout, including through roundtables that bring different parts of government together, to ensure that we tailor our research to the needs of policy-making as best we can and to ensure that the findings of our work are impacting on policy development.
 
Description Department for Levelling up, Housing and Communities roundtable
Geographic Reach National 
Policy Influence Type Participation in a guidance/advisory committee
 
Description Meeting with the Office for Budget Responsibility
Geographic Reach National 
Policy Influence Type Contribution to a national consultation/review
 
Description Policy Roundtable - Good jobs for career progression
Geographic Reach National 
Policy Influence Type Participation in a guidance/advisory committee
 
Description Alternative Margins of Adjustment to Trade Shocks - European University Institute, May 2022 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Postgraduate students
Results and Impact Peter Levell presented the paper 'Alternative Margins of Adjustment to Trade Shocks' at the European University Institute in May 2022.
Year(s) Of Engagement Activity 2022
URL https://www.eui.eu/events?id=549331
 
Description Alternative Margins of Adjustment to Trade Shocks: Self-Employment, Delayed Retirement, and Added Worker Effects - 5th IZA Workshop on Gender and Family Economics, June 2022 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Postgraduate students
Results and Impact Aitor Irastorza-Fadrique presented the paper 'Alternative Margins of Adjustment to Trade Shocks: Self-Employment, Delayed Retirement, and Added Worker Effects' at the 5th IZA Workshop on Gender and Family Economics in June 2022.
Year(s) Of Engagement Activity 2022
 
Description Capital Taxation and Entrepreneurship - Barcelona GSE Summer Forum 2022, June 2022 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact Kate Smith presented the paper 'Capital Taxation and Entrepreneurship' at the Barcelona GSE Summer Forum 2022 in June 2022
Year(s) Of Engagement Activity 2022
 
Description Capital Taxation and Entrepreneurship - DICE Research Seminar 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Postgraduate students
Results and Impact Kate Smith presented the working paper at the DICE Research Seminar
Year(s) Of Engagement Activity 2023
 
Description Capital Taxation and Entrepreneurship - Oxford University Centre for Business Taxation Summer Symposium, June 2022 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Postgraduate students
Results and Impact Kate Smith presented the paper 'Capital Taxation and Entrepreneurship' at the Oxford University Centre for Business Taxation Summer Symposium in June 2022
Year(s) Of Engagement Activity 2022
 
Description Capital Taxation and Entrepreneurship - The CEPR Virtual Industrial Organization Seminar, October 2022 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Postgraduate students
Results and Impact Kate Smith presented the paper 'Capital Taxation and Entrepreneurship' at the The CEPR Virtual Industrial Organization Seminar in October 2022.
Year(s) Of Engagement Activity 2022
 
Description Capital Taxation and Entrepreneurship - University of Chicago - Tsinghua University Virtual Seminar, May 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Postgraduate students
Results and Impact Kate Smith presented the paper 'Capital Taxation and Entrepreneurship' at the University of Chicago - Tsinghua University Virtual Seminar in May 2023
Year(s) Of Engagement Activity 2023
 
Description Changing patterns of work at older ages - ELSA 20th Anniversary Conference at the Royal Society, May 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other audiences
Results and Impact Jonathan Cribb presented the paper 'Changing patterns of work at older ages' at the ELSA 20th Anniversary Conference at the Royal Society in May 2023.
Year(s) Of Engagement Activity 2023
URL https://www.elsa-project.ac.uk/events-1/elsa-20th-anniversary-conference
 
Description Household responses to trade shocks - 24th Annual Meeting of the European Trade Study Group, September 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Undergraduate students
Results and Impact Aitor Irastorza-Fadrique presented the paper 'Household Responses to Trade Shocks' at the 24th Annual Meeting of the European Trade Study Group in September 2023
Year(s) Of Engagement Activity 2023
 
Description Household responses to trade shocks - Centre for Inclusive Trade Policy at the University of Sussex, April 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Undergraduate students
Results and Impact Peter Levell presented the paper 'Household responses to trade shocks' at the Centre for Inclusive Trade Policy at the University of Sussex in April 2023
Year(s) Of Engagement Activity 2023
 
Description Household responses to trade shocks - EEA-ESEM 2023 (Universitat Pompeu Fabra), August 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Postgraduate students
Results and Impact Aitor Irastorza-Fadrique presented the paper 'Household Responses to Trade Shocks' at the EEA-ESEM 2023 (Universitat Pompeu Fabra) in August 2023.
Year(s) Of Engagement Activity 2023
URL https://eea-esem-2023.org/sessions/household-responses-economic-shocks
 
Description Household responses to trade shocks - Spring Meeting of Young Economists 2023, Turin, September 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Undergraduate students
Results and Impact Aitor Irastorza-Fadrique presented the paper 'Household Responses to Trade Shocks' at the Spring Meeting of Young Economists 2023 in Turin in September 2023.
Year(s) Of Engagement Activity 2023
 
Description Household responses to trade shocks - TU Dortmund's Economics Department, June 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Postgraduate students
Results and Impact Aitor Irastorza-Fadrique presented the paper 'Household Responses to Trade Shocks' at the TU Dortmund's Economics Department in June 2023.
Year(s) Of Engagement Activity 2023
 
Description Household responses to trade shocks - US International Trade Commission in Washington DC, May 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact Peter Levell presented the paper 'Household responses to trade shocks' at the USITC in Washington DC in May 2023
Year(s) Of Engagement Activity 2023
URL https://www.usitc.gov/research_and_analysis/seminars_economics.htm
 
Description Household responses to trade shocks - US International Trade Commission, October 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact Peter Levell presented the paper 'Household Responses to Trade Shocks' at the US International Trade Commission in October 2023.
Year(s) Of Engagement Activity 2023
URL https://www.usitc.gov/research_and_analysis/ongoing/distributional_effects_332
 
Description Import Competition and Families - European University Institute, May 2022 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact Peter Levell presented the paper 'Import competition and the family' at the European University Institute in May 2022
Year(s) Of Engagement Activity 2022
 
Description Import Competition and Families - RES & SES Annual Conference 2023, University of Glasgow, April 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Postgraduate students
Results and Impact Aitor Irastorza-Fadrique presented the paper 'Import Competition and Families' at the RES & SES Annual Conference 2023, University of Glasgow in April 2023.
Year(s) Of Engagement Activity 2023
URL https://virtual.oxfordabstracts.com/#/event/3533/submission/740
 
Description Inequality, Redistribution and the Labour Market - Inequality, Redistribution and the Labour Market: NIESR Governors, February 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other audiences
Results and Impact Richard Blundell presented the paper 'Inequality, Redistribution and the Labour Market' at the NIESR Governors Talk in February 2023
Year(s) Of Engagement Activity 2023
 
Description Inequality, Redistribution and the Wage Progression - Inequality, Redistribution and the Wage Progression, February 2023 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Postgraduate students
Results and Impact Richard Blundell gave the keynote lecture at the Labour Force and Annual Population Surveys Conference, ONS - UK Data Service. The talk was titled "Inequality, Redistribution and the Wage Progression".
Year(s) Of Engagement Activity 2023
 
Description Labour and Family Adjustments to Import Competition: Evidence from Longitudinal Census Data - 10th Warwick PhD Conference, June 2022 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Postgraduate students
Results and Impact Aitor Irastorza-Fadrique presented the paper 'Labour and Family Adjustments to Import Competition: Evidence from Longitudinal Census Data' at the 10th Warwick PhD Conference in June 2022.
Year(s) Of Engagement Activity 2023
 
Description Linking our live podcast: Household responses to trade shocks 
Form Of Engagement Activity A broadcast e.g. TV/radio/film/podcast (other than news/press)
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Media (as a channel to the public)
Results and Impact Aitor Irastorza-Fadrique appeared on the Podcast series "Linking our lives" about the research using the ONS Longitudinal Study. In the episode, he discussed his working paper "Household responses to trade shocks", which he co-authored with Peter Levell & Matthias Parey.
Year(s) Of Engagement Activity 2024
URL https://linking-our-lives.libsyn.com/household-responses-to-trade-shocks
 
Description Nobel symposium in Inequality 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact Richard gave a talk titled The challenge of labour market inequality at the Nobel Symposium on Inequality in Stockholm, Sweden
Year(s) Of Engagement Activity 2022
URL https://www.su.se/institute-for-international-economic-studies/research/nobel-symposium-on-inequalit...
 
Description Self- and Family-Insurance against Trade Shocks - Institute for Fiscal Studies, June 2022 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Postgraduate students
Results and Impact Aitor Irastorza-Fadrique presented the paper 'Self- and Family-Insurance against Trade Shocks' at the Institute for Fiscal Studies in June 2022.
Year(s) Of Engagement Activity 2022