What explains the differences in income and labour utilisation and drives labour and economic growth in Europe? A GDP accounting perspective
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.
|Date of creation:||Jan 2009|
|Date of revision:|
|Contact details of provider:|| Postal: Inter-institutional relations and communication Unit, B-1049 Brussels|
Fax: +32 2 298.08.23
Web page: http://ec.europa.eu/economy_finance/index_en.htm
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Giuseppe Carone & Cécile Denis & Kieran Mc Morrow & Gilles Mourre & Werner Röger, 2006.
"Long-term labour productivity and GDP projections for the EU25 Member States : a production function framework,"
European Economy - Economic Papers 2008 - 2015
253, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Carone, Giuseppe & Denis, Cécile & Mc Morrow, Kieran & Mourre, Gilles & Röger, Werner, 2006. "Long-term labour productivity and GDP projections for the EU25 Member States : a production function framework," MPRA Paper 744, University Library of Munich, Germany.
- ?gel de la Fuente & Rafael Dom?ech, .
"Human Capital In Growth Regressions: How Much Difference Does Data Quality Make?,"
UFAE and IAE Working Papers
446.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Angel de la Fuente & Rafael Doménech, 2006. "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make?," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 1-36, 03.
- Angel de la Fuente & Rafael Donénech, 2000. "Human Capital in Growth Regressions: How much Difference Does Data Quality Make?," OECD Economics Department Working Papers 262, OECD Publishing.
- de la Fuente, Angel & Doménech, Rafael, 2000. "Human Capital In Growth Regressions: How Much Difference Does Data Quality Make?," CEPR Discussion Papers 2466, C.E.P.R. Discussion Papers.
- Psacharopoulos, George, 1994.
"Returns to investment in education: A global update,"
Elsevier, vol. 22(9), pages 1325-1343, September.
- Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
- Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
- Paul M. Romer, 1987. "Crazy Explanations for the Productivity Slowdown," NBER Chapters, in: NBER Macroeconomics Annual 1987, Volume 2, pages 163-210 National Bureau of Economic Research, Inc.
- Robert J. Barro & Jong-Wha Lee, 1993.
"International Comparisons of Educational Attainment,"
NBER Working Papers
4349, National Bureau of Economic Research, Inc.
- Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
- Caselli, Francesco & Coleman II, Wilbur John, 2000.
"The World Technology Frontier,"
CEPR Discussion Papers
2584, C.E.P.R. Discussion Papers.
- Buddelmeyer, Hielke & Mourre, Gilles & Ward-Warmedinger, Melanie, 2008. "Why do Europeans work part-time? A cross-country panel analysis," Working Paper Series 0872, European Central Bank.
- Jess Benhabib & Boyan Jovanovic, 1989.
"Externalities and Growth Accounting,"
NBER Working Papers
3190, National Bureau of Economic Research, Inc.
- N. Gregory Mankiw & David Romer & David N. Weil, 1990.
"A Contribution to the Empirics of Economic Growth,"
NBER Working Papers
3541, National Bureau of Economic Research, Inc.
- Sapir, Andre & Aghion, Philippe & Bertola, Giuseppe & Hellwig, Martin & Pisani-Ferry, Jean & Rosati, Dariusz & Vinals, Jose & Wallace, Helen, 2004.
"An Agenda for a Growing Europe: The Sapir Report,"
Oxford University Press, number 9780199271498, December.
- André Sapir & Philippe Aghion & Giuseppe Bertola & Martin Hellwig & Jean Pisani-Ferry & Bernard Lange & José Viñals & Helen Wallace & Marco Buti & Mario Nava & Peter Smith, 2004. "An agenda for a growing Europe: the Sapir report," ULB Institutional Repository 2013/8070, ULB -- Universite Libre de Bruxelles.
- D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," Review of Economic Studies, Oxford University Press, vol. 34(3), pages 249-283.
- Jorgenson, Dale W., 1966. "The Embodiment Hypothesis," Scholarly Articles 3403063, Harvard University Department of Economics.
- Francesco Caselli, 2005.
"Accounting for Cross-Country Income Differences,"
CEP Discussion Papers
dp0667, Centre for Economic Performance, LSE.
- Prescott, Edward C, 1998.
"Needed: A Theory of Total Factor Productivity,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 525-51, August.
- Jean Pisani-Ferry & André Sapir, 2006.
"Last exit to Lisbon,"
- Stefano Scarpetta & Andrea Bassanini & Dirk Pilat & Paul Schreyer, 2000. "Economic Growth in the OECD Area: Recent Trends at the Aggregate and Sectoral Level," OECD Economics Department Working Papers 248, OECD Publishing.
- Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
- Olga Arratibel & Frigyes Ferdinand Heinz & Reiner Martin & Marcin Przybyla & Lucasz Rawdanowicz & Roberta Serafini & Tina Zumer, 2007. "Determinants of growth in the central and eastern European EU member states - a production function approach," Occasional Paper Series 61, European Central Bank.
- N. Diez Guardia & K. Pichelmann, 2006. "Labour Migration Patterns in Europe: Recent Trends, Future Challenges," European Economy - Economic Papers 2008 - 2015 256, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- King, Robert G. & Levine, Ross & DEC, 1994.
"Capital fundamentalism, economic development, and economic growth,"
Policy Research Working Paper Series
1285, The World Bank.
- King, Robert G. & Levine, Ross, 1994. "Capital fundamentalism, economic development, and economic growth," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 259-292, June.
- Ray Barrell & Catherine Guillemineau & Dawn Holland, 2007. "Decomposing Growth in France, Germany and The United Kingdom Using Growth Accounting and Production Function Approaches," National Institute Economic Review, National Institute of Economic and Social Research, vol. 199(1), pages 99-113, January.
- André Sapir, 2007. "European strategies for growth," ULB Institutional Repository 2013/8102, ULB -- Universite Libre de Bruxelles.
- Dale W. Jorgenson, 1966. "The Embodiment Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 74, pages 1.
When requesting a correction, please mention this item's handle: RePEc:euf:ecopap:0354. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ECFIN INFO)
If references are entirely missing, you can add them using this form.