Employment and Productivity Growth in Service and Manufacturing Sectors in France, Germany and the Us

58 Pages Posted: 13 Dec 2002

See all articles by Till von Wachter

Till von Wachter

Columbia Business School - Economics Department; IZA Institute of Labor Economics

Date Written: March 2001

Abstract

The growth patterns of service sectors across France, Germany, and the US exhibit striking differences. This can explain most of the well-known differences in aggregate growth rates of labour productivity and employment across these countries. Having confirmed this observation by a shift-share analysis of key indicators of growth, such as employment, labour productivity and capital, the paper analyses service sector growth in detail. It argues that a careful consideration of the forces of long-run growth may help to better explain differences in employment and productivity growth, in particular if combined with the standard approach, institutional peculiarities of labour markets. In this regard, it first presents new estimates of capital's contribution to labour productivity growth, which take into account skill-biased technological change. Second, it discusses evidence of catch-up growth in European service sectors relative to the US, and how this may affect employment growth in the presence of labour market rigidities.

Keywords: Service sectors; Labour Productivity; Unemployment; Catch-up Growth; Skill-Biased Technological Change

JEL Classification: O3, O5

Suggested Citation

von Wachter, Till, Employment and Productivity Growth in Service and Manufacturing Sectors in France, Germany and the Us (March 2001). ECB Working Paper No. 50. Available at SSRN: https://ssrn.com/abstract=356025

Till Von Wachter (Contact Author)

Columbia Business School - Economics Department ( email )

420 West 118th Street
New York, NY 10027
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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