Labor Productivity. Definition Labor productivity : Productivity per hour- worked:
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Transcript of Labor Productivity. Definition Labor productivity : Productivity per hour- worked:
Labor Productivity
Definition
• Labor productivity :
• Productivity per hour-worked:
LY
LHY
Definition
Importance of labor productivity:
GDP per-capita =
Productivity per hour worked x
Total hours worked x
Participation rate x
Share of adult population to be able to work
Definition
• Factors influencing on productivity growth:
• Capital deepening
• Labor quality
• Total factor productivity
US vs EU
US productivity growth
Source: D. Jorgenson et al. (2008)
US sources of productivity
• From 1995-2000 : ICT
• From 2000 on : Capital deepening
EU: empirical evidence
Source: van Ark et al. (2008)
EU: empirical evidence
Source:R. Inklaar et al.. (2008)
EU: empirical evidence
Source: van Ark et al. (2008)
EU: empirical evidence
Source: van Ark et al. (2008)
EU
• 1950 -1973 : Catching-up period. Technology imitation and new institutions
•1973-1995: Productivity slowdown. Reduction: labor force participation rate and working hours
•1995-2006: Europe’s falling behind. Slower ICT diffusion
EU vs US: sources of prod. growth
Source: van Ark et al. (2008)
EU vs US: sources of prod. growth
Source: van Ark et al. (2008)
The puzzle of service sector
Source: van Ark et al. (2008)
The puzzle of service sector
Source: van Ark et al. (2008)
The puzzle of service sector
Source: R. Inklaar. (2008)
The puzzle of service sector
Source: R. Inklaar. (2008)
The puzzle of service sector
Source: R. Inklaar. (2008)
Strategies for the EU
• Find mechanism to exploit service innovations
• Emphasis on human resources
• Services: less standardized and more customized production.
