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Recent trends and structural breaks in US and EU15 labour productivity growth

Author

Listed:
  • Laura Turner

    (INSEE Paris - INSEE Paris)

  • Hervé Boulhol

    (OCDE - Organisation de Coopération et de Développement Economiques)

Abstract

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 projections of labour productivity growth up to 2009 in order to detect breaks depending on confidence intervals of the projections. The identification of structural breaks in US labour productivity growth is far from obvious. A statistically significant break is found in the late 1990s only if at least the 97.5th percentile of forecasts 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 large enough compared with past variations 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, even when controlling for the convergence of Europe towards US productivity levels that has contributed to higher European performance in the early catch-up phase. Finally, within Europe, the accumulation of ICT capital seems to be related to differences in the shifts in structural labour productivity growth across countries.

Suggested Citation

  • Laura Turner & Hervé Boulhol, 2010. "Recent trends and structural breaks in US and EU15 labour productivity growth," PSE - G-MOND WORKING PAPERS halshs-00963134, HAL.
  • Handle: RePEc:hal:gmonwp:halshs-00963134
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00963134
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    References listed on IDEAS

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    Cited by:

    1. Menzie D. Chinn & Laurent Ferrara & Valérie Mignon, 2013. "Post-recession US Employment through the Lens of a Non-linear Okun's law," NBER Working Papers 19047, National Bureau of Economic Research, Inc.
    2. Raquel Ortega‐Argilés & Mariacristina Piva & Marco Vivarelli, 2014. "The transatlantic productivity gap: Is R&D the main culprit?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(4), pages 1342-1371, November.
    3. Bergeaud, A. & Cette, G. & Lecat, R., 2015. "Productivity trends from 1890 to 2012 in advanced countries," Rue de la Banque, Banque de France, issue 07, June..
    4. Raquel Ortega‐Argilés & Mariacristina Piva & Lesley Potters & Marco Vivarelli, 2010. "Is Corporate R&D Investment In High‐Tech Sectors More Effective?," Contemporary Economic Policy, Western Economic Association International, vol. 28(3), pages 353-365, July.
    5. Antonin Bergeaud & Gilbert Cette & Rémy Lecat, 2016. "Productivity Trends in Advanced Countries between 1890 and 2012," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 420-444, September.
    6. Glocker, Christian & Wegmueller, Philipp, 2018. "International evidence of time-variation in trend labor productivity growth," Economics Letters, Elsevier, vol. 167(C), pages 115-119.
    7. João Sousa Andrade & António Portugal Duarte, 2012. "The Importance of a Good Indicator for Global Exciess Demand," Book Chapters, in: Paulino Teixeira & António Portugal Duarte & Srdjan Redzepagic & Dejan Eric (ed.), European Integration Process in Western Balkan Countries, edition 1, volume 1, chapter 1, pages 11-35, Institute of Economic Sciences.

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    More about this item

    Keywords

    Labour productivity growth; Structural break tests; ICT;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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