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Are Productivity Levels Higher in Some European Countries than in the United States?

  • Gilbert Cette


Estimates produced by the OECD indicate that labour productivity levels are higher in a number of European countries than in the United States, implying that Europe and not the United States is the world technological leader. The author argues that a structural measure of labour productivity, closer to a measure of technical efficiency, would take into account the much lower employment rates and hours of work in Europe. Low employment rates reflect the exclusion of certain low-porductivity groups such as the young and older workers from the labour force. Shorter average hours of work mean that workers experience less fatigue and are more focused when on the job. Consequently, the author argues that there are diminshing returns to the employment rate and hours of work in terms of productivity and that once these effects are taken into account, the United States reemerges as the world technology leader as manifested by labour productivity levels.

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Article provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.

Volume (Year): 10 (2005)
Issue (Month): (Spring)
Pages: 59-68

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Handle: RePEc:sls:ipmsls:v:10:y:2005:4
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  1. Etienne Wasmer, 1999. "Changements de composition de la force de travail. Implications pour les salaires et le chômage," Économie et Prévision, Programme National Persée, vol. 138(2), pages 77-87.
  2. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
  3. Olivier Blanchard, 2004. "The Economic Future of Europe," NBER Working Papers 10310, National Bureau of Economic Research, Inc.
  4. François Magnien, 2003. "Mesurer l'évolution des prix des services de téléphonie mobile : une entreprise difficile," Économie et Statistique, Programme National Persée, vol. 362(1), pages 3-31.
  5. Dirk Pilat & Paul Schreyer, 2001. "Measuring productivity," OECD Economic Studies, OECD Publishing, vol. 2001(2), pages 127-170.
  6. Lecat, R., 2004. "Productivité du travail des grands pays industrialisés : la fin du rattrapage des États-Unis ?," Bulletin de la Banque de France, Banque de France, issue 121, pages 47-67.
  7. Edmond Malinvaud, 1973. "Une explication de l'évolution de la productivité horaire du travail," Économie et Statistique, Programme National Persée, vol. 48(1), pages 46-50.
  8. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  9. Gilbert Cette & Jacques Mairesse & Yussuf Kocoglu, 2000. "La mesure de l'investissement en technologies de l'information et de la communication : quelques considérations méthodologiques," Économie et Statistique, Programme National Persée, vol. 339(1), pages 73-91.
  10. Cette, G. & Strauss-Kahn, M-O., 2003. "Productivité horaire et PIB par tête aux États-Unis et en France — Comparaisons et recommandations," Bulletin de la Banque de France, Banque de France, issue 120, pages 39-58.
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