1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Recent Trends and Structural Breaks in US and EU15 Labour Productivity Growth

This paper examines shifts in labour productivity growth in the United States and in Europe between 1970 and 2007 based on econometric tests of structural breaks. Additionally, it makes use of time-series-based projected labour productivity growth up to 2009 in order to detect any recent break according to a central scenario as well as high and low scenarios, both derived from a 95% confidence interval. The identification of structural breaks in US labour productivity growth is far from obvious. A statistically significant break date is found in the late 1990s only if the upper scenario materialises in the future, which means that despite a clear pick-up in productivity growth in the second half of the 1990s, the size of the hump is not still large enough compared with past variation to make this change a statistically significant break. However, a significant breakpoint is detected in the mid-1990s for the difference in labour productivity growth between the United States and the EU15 based on observed data, which seems to be due to both the initial catch-up of Europe and the halt of the convergence process in the mid-1990s. Finally, European ICT-intensive countries are shown to have structurally performed better in terms of productivity growth than non-ICT-intensive countries.

English

Keywords: structural break tests, labour productivity growth, ICT
JEL: O51: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Economywide Country Studies: U.S.; Canada; E30: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data); O52: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Economywide Country Studies: Europe; O47: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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