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The Productivity Gap between East and West Europe: What Role for Sectoral Structures during Integration?

Listed author(s):
  • Johannes Stephan

    (Institute for Economic Research - Institut für Wirtschaftsforschung Halle IWH)

Analysis into the sources of lower levels of national productivities between Central East European Economies and the European Union is scarce and lacks comparability. These sources are assessed by analysing the role played by sectoral structures. After providing a brief overview over comparative levels of economy-wide labour productivity between the EU-15 average, selected EU cohesion countries and the EU accession countries of Estonia, Poland, the Czech and Slovak Republics, Hungary and Slovenia, a quantitative account of the sectoral content of the national productivity gap is calculated. The paper develops a method to calculate the explanatory power of patterns of sectoral structures for the size of the productivity gap by hypothetically applying average EU- 15 sectoral patterns on Central East European economies’ sectoral productivities. Subsequently, the respective roles of individual sectors in explaining the national productivity gaps are being calculated by attaching weights to sectoral productivity gaps relative to their employment shares. These results are then carefully assessed in terms of potentials and prospects for a swift and complete productivity catch-up and in terms of the most efficient policies to assist productivity convergence.

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Paper provided by EconWPA in its series Development and Comp Systems with number 0403004.

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Length: 18 pages
Date of creation: 09 Mar 2004
Handle: RePEc:wpa:wuwpdc:0403004
Note: Type of Document - pdf; pages: 18
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  1. Cornwall, John & Cornwall, Wendy, 1994. "Growth Theory and Economic Structure," Economica, London School of Economics and Political Science, vol. 61(242), pages 237-251, May.
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