INTRODUCTION

This chapter considers employment and human capital in post-war Britain. It begins with a look at trends in the labour force, employment and unemployment, taking account of the age distribution of the labour force, female participation, trends in participation in full-time education, part-time working, self-employment and the industrial composition of employment. Following this the chapter devotes most attention to the skill composition of the labour force, contrasting the position in the UK with that in the United States and Germany. Low investment in human capital has frequently been seen as a weakness of the British economy, and has been identified as a major cause of Britain’s relative economic decline during the twentieth century, particularly by writers in the period from the end of the Second World War (Landes 1972; Levine 1967; Aldcroft 1992). The chapter first considers human capital accumulation in Britain from the Second World War to 1979, examining data available from a range of sources. This period also coincides with British productivity levels falling behind those in other European countries.

This is followed by a consideration of the two decades since 1979, when more detailed data on labour force skills are available. The final section considers the implications of human capital accumulation for Britain’s relative productivity position. It is important to realise that at the end of the Second World War, although the United States had a substantial lead over Britain in aggregate labour productivity, Britain still had high aggregate labour productivity by European standards, and was not overtaken by most west European countries before the late 1960s (Maddison 1995).