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Article: What do comparisons of the last two economic recoveries tell us about the UK labour market?
- Article from:
- National Institute Economic Review
- Article date:
- May 1, 1996
- Author:
CopyrightCOPYRIGHT 1996 National Institute of Economic and Social Research. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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There are signs that the UK labour market has behaved differently in the most recent economic recovery. After the end of the recession in 1992 unemployment began to fall much earlier than expected, whilst wage and price inflation remained very low. Chart 1 plots unemployment and real wages in the first three years of the last two recoveries(1). In both cases unemployment rose in the first year of the recovery but thereafter the performance in the 1990s is much better. In the second year, unemployment began to fall significantly, much earlier than it had in the 1980s recovery. Three years after the low point in output the rate of unemployment was around 8 1/2 per cent, 2 1/2 ...