The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that: • a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders. Please consult

more »

... full DRO policy for further details. Abstract This paper presents new information from plant-level data on the UK's productivity performance since 2008 and considers whether a fall in the capital-labour ratio explains the UK's productivity puzzle. The results show that, while both manufacturing and services experienced large declines in labour productivity post-2008, the UK's poor TFP productivity performance is primarily a service sector and small-plant phenomenon. Most of the fall in TFP in services is accounted for by a large negative TFP shock in 2008-2012. By decomposing the change in average labour productivity, it is shown that declines in the intermediate inputs-labour (rather than the capital-labour) ratio and decreases in TFP were responsible for the fall in labour productivity.