Structural changes and labor productivity slowdown in the Euro Area

Marcello Estevão

Revista ESPE - Ensayos Sobre Política Económica, 2007, vol. 25, issue 53, No 4638, 336-367

Abstract: Slow productivity growth has plagued the euro area since the mid-1990s. That is particularly striking in view of the large productivity gains in the United States during the same period. This paper shows that the deceleration in labor productivity in the euro area was caused by structural changes in wage formation that have affected the relative price of la-bor, increased the labor intensity of growth, and, thus, reduced the rate of capital deepening. Techno-logical shocks seem to have played a minor role in explaining this deceleration. This is a general eco-nomic effect that may surface in other countries as they fi ght to lower unemployment rates.

Keywords: productivity growth; structural change; wage bargaining; employment creation. (search for similar items in EconPapers)
JEL-codes: D24 E22 E24 J23 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

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https://doi.org/10.32468/Espe.5308

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Journal Article: Structural changes and labor productivity slowdown in the Euro Area (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000107:004638

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