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What explains the differences in income and labour utilisation and drives labour and economic growth in Europe? A GDP accounting perspective

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  • Gilles Mourre

Abstract

The paper decomposes GDP both in terms of level per capita and growth rate, so as to identify the sources of income differences and of economic growth for all EU27 member states. This accounting approach has multiple advantages, although a number of substantial caveats should be borne in mind when interpreting the results. In particular, the detailed accounting approach helps distinguish exogenous from policy-influenced growth drivers. The combination of lower per-hour productivity and lower labour utilisation is the cause of relatively low per capita GDP in euro area and EU15 countries, while weak productivity remains the main concern in the new member states. GDP growth rate has been broken down into 12 items, including an indicator of labour quality, based upon the composition of employment by educational attainment.

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File URL: http://ec.europa.eu/economy_finance/publications/publication13796_en.pdf
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Bibliographic Info

Paper provided by Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission in its series European Economy - Economic Papers with number 354.

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Length: 88 pages
Date of creation: Jan 2009
Date of revision:
Handle: RePEc:euf:ecopap:0354

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Keywords: GDP accounting; European Union; Aggregate employment; Average hours worked; Quality of Labour; Mourre; What explains the differences in income and labour utilsation and drives labour and economic growth in Europe? A GDP accounting perspective;

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Cited by:
  1. Lorenzo Codogno & Francesco Felici, . "Assessing Italy's Reform Challenges:What Do Growth Accounting and Structural Indicators Say?," Working Papers 8, Department of the Treasury, Ministry of the Economy and of Finance.
  2. Louis N. Christofides & Maria Michael, 2010. "Structural Weaknesses in the Economy of Cyprus: How Do We Score Relative to the EU15?," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 4(2), pages 43-71, December.
  3. Richard Harris & John Moffat, 2011. "Plant-level determinants of total factor productivity in Great Britain, 1997-2006," LSE Research Online Documents on Economics 33561, London School of Economics and Political Science, LSE Library.
  4. Bergljot Barkbu & Jesmin Rahman & Rodrigo O. Valdés, 2012. "Fostering Growth in Europe Now," IMF Staff Discussion Notes 12/07, International Monetary Fund.
  5. Richard Harris & John Moffat, 2012. "Total Factor Productivity Growth in Local Economic Partnership Regions in Britain, 1997-2008," SERC Discussion Papers 0112, Spatial Economics Research Centre, LSE.

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