Experiences during the Great Recession support the view that the UK labor market is relatively flexible. Unemployment … stagnation of productivity and wages; an open question is whether this represents a cyclical phenomenon or a structural problem …

Experiences during the Great Recession support the view that the UK labor market is relatively flexible. Unemployment … stagnation of productivity and wages; an open question is whether this represents a cyclical phenomenon or a structural problem …

productivity-wage gap. We connect these trends by building a model where firms post long-lived vacancies and engage in on … and the wedge between hiring and meeting rates. All three channels lower wages while raising productivity. Quantitatively …, increased replacement hiring explains half the increase in the productivity-wage gap. The socially efficient outcome features …