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The UK Labour Market and the 2008-9 Recession

Published online by Cambridge University Press:  26 March 2020

Paul Gregg  and
Jonathan Wadsworth
Paul Gregg
Affiliation:
University of Bristol, CMPO and CEP
Jonathan Wadsworth*
Affiliation:
Royal Holloway College, University of London, CEP, CReAM and IZA
*
E-mail: J.Wadsworth@rhul.ac.uk
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Abstract

The recession of 2008–9 inflicted a larger cumulative loss of UK output than any of the other postwar recessions. Nevertheless, employment rates remained higher than might have been expected given the experience of previous recessions. The main reasons for this appear to be a combination of high firm profitability levels going into the recession, supportive monetary and fiscal policies during the recession, reductions in real producer wages and relatively buoyant real consumer wages. Unemployment had reached its lowest levels for 30 years going in to the latest recession and has also remained relatively subdued through the downturn, certainly compared to previous recessions. A combination of lower inflow rates into unemployment, allied with a relatively higher outflow rate into employment underlie this. As government support for the economy is scaled back, it may be however that it will take a long time for employment to return to levels last seen before the recession.

Keywords

Labour marketrecessionunemploymentwagesJ0J2J3J6
Type
Research Articles
Information
National Institute Economic Review , Volume 212 , April 2010 , pp. R61 - R72
Copyright
Copyright © 2010 National Institute of Economic and Social Research

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Footnotes

∗

A fuller version of this article can be found in The Labour Market in Winter. The State of Working Britain, Oxford University Press (forthcoming).

References

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