2022-01-30-牛津经济研究院-United_Kingdom_A_new_era_of_weaker_labour_supply_growth_3页_218kb

Report Summary

• Introduction: UK labour supply has significantly decreased post-pandemic, following a decade of strong growth, and is expected to grow at a slower pace in the 2020s due to structural factors.
• Causes of Decline: The primary drivers are a collapse in net inward migration due to travel restrictions during the pandemic (estimated to have dropped sharply, with net inward migration falling from ~271,000 in 2019 to ~34,000 in 2020) and a slowdown in the effects of the rising state pension age.
• Labour Participation Rates: Lower participation rates, particularly among males and those under 65, have also contributed. However, labour market recovery and wage growth are expected to quickly boost participation.
• Labour Supply Projection: Labour supply growth in the 2020s is projected to be much slower (0.3% annually) compared to the 2010s (0.9%), potentially leading to a contraction in the working-age population year-on-year towards the end of the decade.
• Factors Affecting Future Migration: Net inward migration is expected to remain weak (estimating ~100,000 per year or less) due to restrictive post-Brexit immigration rules, despite easing travel restrictions and a strong UK labour market.
• Impact on Potential Output: Slower labour supply growth means its contribution to UK potential output growth will decline, further emphasizing the importance of boosting productivity growth.
• Recovery Outlook: Labour supply is expected to rebound in 2022 due to increased immigration and participation linked to economic recovery.