National Institute Economic Review

This appendix considers the extent to which changes in UKpast and future trends in productivity are affected by changes in the composition of the labour force. The hypothesis is that certain groups of workers are less productive than others and that shifts in the composition of the labour force in favour of those groups will lower productivity overall. The opposite will be true if the composition of the labour force shifts away from the lower productivity groups.

This article explains that a major factor in the 1979 public expenditure cuts is the long run tendency for public expen diture to increase in relative cost. It traces the origins of this to the inadequate measurement of public service output and describes the historical trends in the 'relative price effect'. The article argues for a better measure of output and cost in the government sector so that the development of services can be planned more coherently, without recourse to programme cuts. It shows that cash limits do not fully solve the problem, and that the recent cuts will have no immediate effect on the share of government spending in GDP.

The National Institute has launched a series of conferences on important issues of economic policy. The conference papers and accounts of the conference discussions are being published by Heinemann Educational Books. The first two books in the series, entitled Demand Management and De-industrialisation, were the outcome of conferences held in December 1977 and June 1978 respectively. The third book, of which this article gives a brief summary under the same title, appeared this month, following a conference in June 1979. The purpose of the conference was to provide a forum for discussion of the trade and exchange-rate policies which the United Kingdom should pursue domestically and advocate in the international arena, and the choice of topics reflects the attention recently devoted there to non-tariff barriers to trade, general economic relations between North and South, the European Monetary System, and its differing implications for debtor and creditor countries. Future studies will be conducted under the joint sponsorship of the National Institute, the Policy Studies Institute and the Royal Institute of International Affairs. The first under the new arrangement will take place next month, with 'Britain in Europe' as its theme. The series has been started with financial support from the Nuffield Foundation.