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The French Productivity Puzzle

Listed author(s):
  • Askenazy, Philippe

    ()

    (CNRS)

  • Erhel, Christine

    ()

    (University of Paris 1 Panthéon-Sorbonne)

Since 2008, France experiences a sharp productivity slowdown. Both output per hour and total factor productivity are particularly deceptive in the market economy. This recent trend contrasts with the acceleration of productivity during the previous crisis in the 1990's and the continuous increase during the following decade. This text provides the first comprehensive exploration of this puzzling break. The direct impacts of the Great Recession on industry composition or reallocation of capital are not significant suspects for a slowdown occurring across business activities. Labour market mechanisms are better candidates. On the one hand, the French labour market policy has massively boosted the creation of low-productive jobs including very-short term employees and self-employed workers. On the other hand, firms, which benefit from massive tax cuts, have hoarded their high-skilled workforce. In addition, the spread of innovative HRM incentives, e.g. employee shareholding, seems to have turned productivity more sensitive to the business cycle (and especially to the fall of stock markets).

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 9188.

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Length: 42 pages
Date of creation: Jul 2015
Handle: RePEc:iza:izadps:dp9188
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  1. Ronald B. Davies & Julien Martin & Mathieu Parenti & Farid Toubal, 2014. "Knocking on Tax Haven's Door: Multinational Firms and Transfer Pricing," CESifo Working Paper Series 5132, CESifo Group Munich.
  2. Philippe Aghion & Philippe Askenazy & Nicolas Berman & Gilbert Cette & Laurent Eymard, 2012. "Credit Constraints And The Cyclicality Of R&D Investment: Evidence From France," Journal of the European Economic Association, European Economic Association, vol. 10(5), pages 1001-1024, October.
  3. Nicholas Bloom, 2009. "The Impact of Uncertainty Shocks," Econometrica, Econometric Society, vol. 77(3), pages 623-685, May.
  4. Haskel, J & Corrado, C & Jona-Lasinio, C & Iommi, M, 2012. "Intangible capital and growth in advanced economies: measurement methods and comparative results," Working Papers 9913, Imperial College, London, Imperial College Business School.
  5. Askenazy, Philippe & Erhel, Christine, 2015. "The French Productivity Puzzle," IZA Discussion Papers 9188, Institute for the Study of Labor (IZA).
  6. Chevalier, Paul-Antoine & Lecat, Rémy & Oulton, Nicholas, 2012. "Convergence of firm-level productivity, globalisation and information technology: Evidence from France," Economics Letters, Elsevier, vol. 116(2), pages 244-246.
  7. Philippe Askenazy & Lutz Bellmann & Alex Bryson & Eva Moreno Galbis, 2016. "Productivity Puzzles Across Europe," Post-Print halshs-01379283, HAL.
  8. Eve Caroli & Jérôme Gautié, 2008. "Low wage work in France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00266332, HAL.
  9. Laura Hospido & Eva Moreno-Galbis, 2015. "The Spanish productivity puzzle in the Great Recession," Working Papers 1501, Banco de España;Working Papers Homepage.
  10. Moreno-Galbis, Eva & Sopraseuth, Thepthida, 2014. "Job polarization in aging economies," Labour Economics, Elsevier, vol. 27(C), pages 44-55.
  11. Bloom, Nicholas & Van Reenen, John, 2011. "Human Resource Management and Productivity," Handbook of Labor Economics, Elsevier.
  12. Askenazy, Philippe, 2013. "Capital Prices and Eurozone Competitiveness Differentials," CEPREMAP Working Papers (Docweb) 1301, CEPREMAP.
  13. Philippe Askenazy & Christine Erhel, 2015. "Productivity Puzzles in France," PSE Working Papers hal-01297703, HAL.
  14. Alina Barnett & Ben Broadbent & Adrian Chiu & Jeremy Franklin & Helen Miller, 2014. "Impaired Capital Reallocation and Productivity," National Institute Economic Review, National Institute of Economic and Social Research, vol. 228(1), pages 35-48, May.
  15. Corrado, Carol & Haskel, Jonathan & Iommi, Massimiliano & Jona-Lasinio, Cecilia, 2012. "Intangible Capital and Growth in Advanced Economies: Measurement and Comparative Results," CEPR Discussion Papers 9061, C.E.P.R. Discussion Papers.
  16. repec:hrv:faseco:30752812 is not listed on IDEAS
  17. Philippe Askenazy & Christine Erhel, 2015. "Okun’s Laws Differentiated by Education," PSE Working Papers hal-01297704, HAL.
  18. Luc Arrondel & André Masson, 2011. "L'épargnant dans un monde en crise : ce qui a changé," Post-Print halshs-00654662, HAL.
  19. repec:dau:papers:123456789/7001 is not listed on IDEAS
  20. Gonthier, Pauline, 2012. "Why Was Short-Time Work Unattractive During the Crisis?," Institute for Research on Labor and Employment, Working Paper Series qt5dn0w9b1, Institute of Industrial Relations, UC Berkeley.
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