Structural change, institutions and the dynamics of labor productivity in Europe

Journal of Evolutionary Economics - Tập 30 - Trang 1275-1300 - 2019
Riccardo Pariboni1,2, Pasquale Tridico2
1Max Planck Institute for the Study of Societies (MPIFG), Cologne, Germany
2Roma Tre University, Dipartimento di Economia, Rome, Italy

Tóm tắt

The objective of this paper is to explain the reasons behind the dynamics of labor productivity (LP) growth during a process of institutional and structural change. We show - by means of a theoretical discussion and an empirical analysis, conducted on a sample of 25 European countries for the period 1995–2016 - that four main channels contribute to explaining the evolution of LP. First, the speed of investment, which incorporates innovation and favors an increase of LP growth; second, the speed of Research and Development (R&D), which allows for the creation of new ideas and shows the “dynamism of a society”, having positive effects on LP; third, the deregulation of labor markets and the increase of temporary employment, both of which encourage labor-intensive strategies by firms, with low value-added and low productivity gains; fourth, the direction of structural change, which can take place toward services industries affected by “Baumol’s disease”.

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