U.K. Productivity Puzzle Deepens as Older People Work More

(Bloomberg) --

Older people and those educated to degree level disproportionately drove the U.K.’s post-crisis pickup in hours worked, adding a mystery to the country’s weak productivity over the past decade, according to the Office for National Statistics.

Britons aged 50 years or older accounted for one-in-three hours worked last year, up from a quarter in 2008, a rise that could potentially bolster productivity due to their greater experience. The increase is in part caused by the U.K.’s aging population as birth rates decline, but also reflects that younger workers faced the largest reduction in jobs, the ONS said.

The labor force is also becoming more highly skilled, with those of degree or post graduate-level education making up 35% of working hours in 2018, from 25% a decade earlier, the analysis found. Workers with no qualifications fell to 34% over the period.

While the data suggest efficiency should be improving in the U.K. economy, persistent weakness has left it lagging behind most of its Group of Seven peers. Annual productivity growth has averaged around 0.5% since the recovery compared with over 2% in the years prior to 2008.

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