Transcript Labour productivity in some European countries and in the United

Labour productivity
in some
European countries
and in the United States
Gilbert CETTE
- Banque de France
- Université de la Méditerranée
MAIN MESSAGES
• Apparently some EU countries productivity > US
• Thorough analysis : all EU behind the US
• Lower per capita GDP reflects lower « structural » labour
input (employment rate and working time) as well as lower
productive efficiency
• e.g higher employment rate  lower productivity as new
employees probably less productive
• To catch up the US level, we need both higher employment
rate and productivity, which require further structural
reforms
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Table 1 : Per capita GDP and labour
productivity in 2002
Country
Labour productivity per
hour
Per capita GDP
As a % of US level
As a % of US level
US
EU
Japan
Belgium
France
Germany
Italy
Netherlands
United
Kingdom
OECD Eurostat
VA-MG
100 100
91 88.2
72 67.5
111 106.3
103 106.6
101 91.7
105 91.8
106 100.2
79 78.6
100
91.6
73.1
112.0
107.8
101.5
97.2
103.8
81.7
OECD Eurostat
100
73
74
78
77
75
75
82
74
100
72.8
73.4
77.5
76.1
72.5
71.5
81.1
78.2
VA-MG
100
71.7
73.7
76.2
72.8
75.0
73.4
80.2
72.7
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Table 2 : Hours worked and
employment rate in 2002
Country
US
EU
Japan
Belgium
France
Germany
Italy
Netherlands
United
Kingdom
Average
Employment Labour force
Standardised
annual hours
rate
participation unemployment rate
worked
As a % of
As a % of
As a % of labour
In hours
population
aged 15-64
population
aged 15-64
force
1,815
71.9
64.3
68.2
59.7
61.1
65.3
55.6
73.2
72.7
76.4
69.8
72.3
64.1
68.0
71.5
61.2
75.6
76.6
5.8
7.6
5.4
7.3
8.7
8.2
9.0
2.8
5.1
1,809
1,559
1,545
1,444
1,619
1,340
1,707
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Table 3 : Employment rates in 2002 – As a %
Population aged 15-64 aged 15-24
aged 25-54
aged 55-64
Country
Total
Total
Total
Men Women
Total
US
71.9
55.7
79.3
86.6
72.3
59.5
EU
64.3
40.5
77.1
86.7
67.3
40.6
Japan
68.2
41.0
78.0
92.0
63.9
61.6
Belgium
59.7
28.5
76.6
86.2
66.8
25.8
France
61.1
23.3
78.3
87.0
71.6
34.2
Germany
65.3
45.6
78.7
85.3
71.9
38.4
Italy
55.6
26.7
70.1
86.0
54.0
28.9
Netherlands
73.2
66.9
81.9
91.2
72.5
41.8
United
Kingdom
72 .7
61.0
80.6
87.2
73.8
53.3
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• Decreasing returns to:
– Employment rate :
the first to be employed are the more efficient
– Hours worked :
“fatigue effects” outweigh those of fixed costs
• Banque de France (country panel data) econometrics “long term”
elasticity of productivity per hour is about:
– - 0.35 relative to hours worked
– - 0.5 relative to employment rate
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Table 4 : Observed and ‘structural’ hourly
productivity in 2002 - As a % of US
Country
Observed productivity Effect (in %) of the Structural productivity per hour
per hour
gap with the U S …
As a % of US level
OECD
Eurostat
As a % of US level
VA-MG …in hours
…in the
worked
employment
[d]
rate
[c]
[e]
[f]
=
[a]-[d]-[e]
[g]
=
[b]-[d]-[e]
[h]
=
[c]-[d]-[e]
100.0
100.0
100.0
[a]
[b]
US
100
100.0
100.0
EU
91
88.2
91.6
4.4
5.3
81.3
78.5
81.9
Japan
72
67.5
73.1
0.1
2.6
69.3
64.8
70.4
Belgium
111
106.3
112.0
4.9
8.5
97.6
92.8
98.6
France
103
106.6
107.8
5.2
7.5
90.3
93.9
95.1
Germany
101
91.7
101.5
7.2
4.6
89.3
80.0
89.8
Italy
105
91.8
97.2
3.8
11.3
89.9
76.7
82.1
Netherlands
106
100.2
103.8
9.2
-0.9
97.7
91.9
95.5
United
Kingdom
79
78.6
81.7
2.1
-0.6
77.5
77.0
7
80.2
Decomposition of the GDP per capital gap
(from productivity, working time and employment rate)
compare to US - %
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Summary conclusion
- Lower labour input from
• partly lifestyle choice
• partly conflicting fiscal signals
• partly rigidities
• …..
Lower Lower structural productivity from
• partly lower education level
• partly lower ICTS diffusion
• partly rigidities
• …..
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From « observed hourly productivity » to
« structural hourly productivity »
In % of the US level
Calculation
French case
« observed productivity »
[productivity elasticity relative to working
time
x
difference in working time (in %)]
[productivity
elasticity relative to
employment rate
x
difference in employment rate (in%)]
=
« structural productivity »
107.8
[-0.35
x
-15%]
[-0.5
x
-15%]
=
95.1
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