Working Paper: NBER ID: w17584
Authors: Casey B. Mulligan
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.
Keywords: Labor Productivity; Recession; Labor Market Distortions
JEL Codes: E24; E32; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| labor market distortions (J48) | labor productivity (J24) |
| labor market distortions (J48) | labor hours (J22) |
| labor productivity (J24) | real wages (J31) |
| real wages (J31) | labor hours (J22) |
| labor hours (J22) | labor productivity (J24) |