all the three variables, average hours, labour force participation rate and labour productivity, are what is called pro-cyclical. They rise during an expansion as the URATE falls, and vice versa. Firstly, hours are strongly pro-cyclical, sharply reduced by employers during a recession. Secondly, during a recession, productivity declines since existing workers and other resources are not fully utilised. This is called labour hoarding in macroeconomics and ‘benching’ in India’s Information Technology industry. Thirdly, as the economy weakens, many workers drop out of the labour force instead of
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