Input - Output Modelling of Labour Productivity and the Working Time in Greece

In Greece, the total annual working hours per employer are significantly over the average EU level placing the country in the first position in EU-15. A key question related to this situation is the calculation of the diffusion effects in terms of productivity in the Greek economy, if the final demand for some industry changes. To do this, we apply a methodology for calculating labour productivity change by sector of economic activity in an input – output framework. More specifically, through this analysis, the change in final demand is translated into the levels of working time of each sector and the levels of intermediates that are purchased by each sector to produce that output. The input-output tables and the working time data for our applications are provided by the National Statistical Service of Greece and the Statistical Office of the European Communities. So, we investigate the change in the sectoral productivity that will be generated if a change in the final demand takes place, whereas the working time is cut down to the average EU-15 level. The results suggest that a decrease of the annual working time in Greece will cause a significant increase in the gross labour productivity of the various sectors. We believe that the results of the paper could be utilized for the feedback of the policy formulation procedure and could contribute to the efficient allocation of labour. The lack of comparability in methodology and time period hampers multi-country analyses.