Time-varying predictability of labor productivity on inequality in United Kingdom

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Authors

Gabauer, David
Gupta, Rangan
Nel, Jacobus
Yamaka, Woraphon

Journal Title

Journal ISSN

Volume Title

Publisher

Springer

Abstract

In this paper, we analyze time-varying predictability of labor productivity for growth in income (and consumption) inequality of the United Kingdom (UK) based on a high-frequency (quarterly) data set over 1975:Q1 to 2016:Q1. Results indicate that the growth rate of an index of labor productivity has a strong predictive power on growth rate of income (and consumption) inequality in the UK. Interestingly, the strength of the predictive power is found to be higher towards the end of the sample period in the wake of the global financial crisis. In addition, based on time-varying impulse response function analysis, we find that inequality and labor productivity growth rates are in general negatively associated over our sample period, barring a short-lived positive impact initially.

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Keywords

Labor productivity, Inequality, Time-varying predictions

Sustainable Development Goals

Citation

Gabauer, D., Gupta, R., Nel, J. et al. Time-Varying Predictability of Labor Productivity on Inequality in United Kingdom. Social Indicators Research 155, 771–788 (2021). https://doi.org/10.1007/s11205-021-02622-w.