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

Author

Listed:
  • Laura Turner

    (INSEE - Institut national de la statistique et des études économiques (INSEE))

  • Hervé Boulhol

    (OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development)

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," Working Papers halshs-00963134, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00963134
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00963134v1
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    References listed on IDEAS

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