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Recent Trends and Structural Breaks in US and EU15 Labour Productivity Growth

Author

Listed:
  • Laure Turner

    (OECD)

  • Hervé Boulhol

    (OECD)

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 projected labour productivity growth up to 2009 in order to detect any recent break according to a central scenario as well as high and low scenarios, both derived from a 95% confidence interval. The identification of structural breaks in US labour productivity growth is far from obvious. A statistically significant break date is found in the late 1990s only if the upper scenario 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 still large enough compared with past variation 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 based on observed data, which seems to be due to both the initial catch-up of Europe and the halt of the convergence process in the mid-1990s. Finally, European ICT-intensive countries are shown to have structurally performed better in terms of productivity growth than non-ICT-intensive countries. Tendances récentes et ruptures structurelles de la croissance de la productivité du travail aux États-Unis et dans UE15 Ce papier étudie les changements structurels dans la croissance de productivité du travail aux États-Unis et en Europe entre 1970 et 2007 à partir de tests de rupture de tendance. Il incorpore également des prévisions de la croissance de la productivité du travail jusqu’en 2009 afin de détecter des ruptures récentes selon un scénario central, ainsi que haut et bas tous deux définis à partir d’un intervalle de confiance à 95%. Premièrement, l’identification de ruptures structurelles dans la croissance de la productivité du travail aux États-Unis ne va pas de soi. Une rupture à la fin des années 1990 est mise en évidence seulement si le scenario haut est amené à se réaliser dans le futur, ce qui signifie que malgré la réelle hausse de la croissance de la productivité américaine dans la seconde moitié des années 1990, seuls des chiffres à venir élevés feraient de ce changement une rupture statistiquement significative au regard des variations passées. Cependant, sur la période observée, la différence entre les taux de croissance américain et européen de la productivité du travail présente une rupture significative au milieu des années 1990, qui semble due au rattrapage de l’Europe et à l’arrêt de la convergence au milieu des années 1990. Enfin, les pays Européens dont l’accumulation de capital dans les TIC a été plus intensive ont eu une croissance de la productivité structurellement plus forte que les pays dont l’investissement a été moindre.

Suggested Citation

  • Laure Turner & Hervé Boulhol, 2008. "Recent Trends and Structural Breaks in US and EU15 Labour Productivity Growth," OECD Economics Department Working Papers 628, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:628-en
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    File URL: http://dx.doi.org/10.1787/240826028657
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    References listed on IDEAS

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    1. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2006. "Projecting Productivity Growth: Lessons from the US Growth Resurgence," Chapters,in: The New Economy and Beyond, chapter 2 Edward Elgar Publishing.
    2. Gilles Mourre, 2006. "Did the pattern of aggregate employment growth change in the euro area in the late 1990s?," Applied Economics, Taylor & Francis Journals, vol. 38(15), pages 1783-1807.
    3. Carlos Santos & Maria Alberta Oliveira, 2010. "Assessing French inflation persistence with impulse saturation break tests and automatic general-to-specific modelling," Applied Economics, Taylor & Francis Journals, vol. 42(12), pages 1577-1589.
    4. Bruce E. Hansen, 2001. "The New Econometrics of Structural Change: Dating Breaks in U.S. Labour Productivity," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 117-128, Fall.
    5. Jushan Bai & Pierre Perron, 2003. "Computation and analysis of multiple structural change models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 1-22.
    6. Robert J. Gordon & Ian Dew-Becker, 2005. "Why did Europe’s productivity catch-up sputter out? a tale of tigers and tortoises," Proceedings, Federal Reserve Bank of San Francisco.
    7. Gabriel Rodriguez & Yiagadeesen Samy, 2003. "Analysing the effects of labour standards on US export performance. A time series approach with structural change," Applied Economics, Taylor & Francis Journals, vol. 35(9), pages 1043-1051.
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    Cited by:

    1. Menzie Chinn & Laurent Ferrara & Valérie Mignon, 2013. "Post-Recession US Employment through the Lens of a Non-Linear Okun's Law," Working Papers 2013-13, CEPII research center.
    2. Raquel Ortega-Argilés & Mariacristina Piva & Marco Vivarelli, 2014. "The transatlantic productivity gap: Is R&D the main culprit?," Canadian Journal of Economics, Canadian Economics Association, vol. 47(4), pages 1342-1371, November.
    3. 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.
    4. 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..

    More about this item

    Keywords

    croissance de la productivité du travail; ICT; labour productivity growth; structural break tests; tests de rupture structurelle; TIC;

    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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