Structural breaks in labor productivity growth: the United States vs. the European Union

Juan F Jimeno, Esther Moral () and Lorena Saiz ()
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Esther Moral: Banco de España
Lorena Saiz: Banco de España

No 625, Working Papers from Banco de España

Abstract: There is a stark contrast between the recent evolution of labor productivity (and TFP) in the US and EU countries. In the US it accelerated around the mid-1990s and there is evidence of reversion to a high-growth regime. In some EU countries, while employment-population ratios started to rise after a period of stagnant employment, labor productivity (and TFP) decelerated. In this paper we apply univariate and multivariate methods, that have been used to detect structural breaks in productivity growth in the US economy, to EU data to confirm the existence of a significant permanent shift to lower productivity growth in some European countries around the mid-1990s. We find a structural break in mean labour productivity growth in the US around the mid-1990s (towards higher growth), in Continental Europe around the early 1990s (towards lower growth) and no evidence of structural breaks in the UK.

Keywords: structural breaks; labor productivity; markov switching models (search for similar items in EconPapers)
JEL-codes: C22 O47 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2006-10
New Economics Papers: this item is included in nep-eec, nep-eff and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:0625

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