This paper examines shifts in labour productivity growth in the United States and in Europe between 1970
and 2007 based on econometric tests of structural breaks. Additionally, it makes use of time-series-based
projected labour productivity growth up to 2009 in order to detect any recent break according to a central
scenario as well as high and low scenarios, both derived from a 95% confidence interval. The identification
of structural breaks in US labour productivity growth is far from obvious. A statistically significant break
date is found in the late 1990s only if the upper scenario materialises in the future, which means that
despite a clear pick-up in productivity growth in the second half of the 1990s, the size of the hump is not
still large enough compared with past variation to make this change a statistically significant break.
However, a significant breakpoint is detected in the mid-1990s for the difference in labour productivity
growth between the United States and the EU15 based on observed data, which seems to be due to both the
initial catch-up of Europe and the halt of the convergence process in the mid-1990s. Finally, European
ICT-intensive countries are shown to have structurally performed better in terms of productivity growth
than non-ICT-intensive countries.
Recent Trends and Structural Breaks in US and EU15 Labour Productivity Growth
Working paper
OECD Economics Department Working Papers
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Abstract
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