Productivity Slowdown Research Articles

World Productivity: 1996–2014

We use a new growth accounting method to quantify the drivers of world total factor productivity (TFP) growth during 1996–2014 and uncover four main results. World productivity growth is volatile from year to year. This mainly reflects reallocation of labor across country-industries. The contribution of country-industry level productivity growth to world productivity is relatively constant over time. This constancy masks that the increased importance of emerging economies offsets a productivity slowdown in advanced economies. After 2008, this offsetting effect dissipated and world TFP growth declined. These conclusions are robust to the inclusion of markups in the analysis. (JEL E23, E32, O30, O47)

The UK Productivity Puzzle: A Survey of the Literature and Expert Views

Since 2008, the UK’s productivity has stagnated, leading to the widely debated “productivity puzzle”. Understanding this phenomenon and its drivers is crucial for managers and policymakers. This article summarises theoretical and empirical literature on the determinants of productivity in general terms, as well as their relevance to the UK’s productivity performance. It also discusses to what extent the findings from a survey of leading UK academic experts on productivity provide support for the existing theoretical and empirical evidence on this topic, and help identify and validate the most important factors explaining the UK’s productivity slowdown since 2008. The combination of our literature review and survey findings suggests that key determinants of the UK’s productivity slowdown include: insufficient investment; insufficient quality of infrastructure; limitations in human capital stock; and management quality issues.

The Productivity Slowdown in Advanced Economies: Common Shocks or Common Trends?

This paper reviews advanced‐economy productivity developments in recent decades. We focus primarily on the facts about, and explanations for, the mid‐2000s labor‐productivity slowdown in large European countries and the United States. Slower total factor productivity (TFP) growth was the proximate cause of the slowdown. This conclusion is robust to measurement challenges including the role of intangible assets, rankings of productivity levels, and data revisions. We contrast two main narratives for the stagnating TFP frontier: The shock of the Global Financial Crisis; and a common slowdown in TFP trends. Distinguishing these two empirically is hard, but the pre‐recession timing of the U.S. slowdown suggests an important role for the common‐trend explanation. We also discuss the unusual pattern of labor productivity growth since the start of the Covid‐19 pandemic. Although it is early, there is little evidence so far that the large pandemic shock has changed the slow pre‐pandemic trajectory of labor‐productivity growth.

The role of inefficiency in a productivity puzzle: Regional evidence for Great Britain

AbstractFrom around the 2008 crisis there has been a marked slowdown in UK productivity. This has been referred to as a productivity puzzle as there is no consensus on the key explanations for this slowdown. Using data for all the 168 International Territorial Level 3 areas in Great Britain (2004–2020), we make two empirical contributions to the literature on this puzzle. First, we are the first to analyze this productivity puzzle using a stochastic frontier model to account for technical inefficiency. Second, to aid policymakers we uncover the areas that represent spatial total factor productivity (TFP) growth hubs, spokes, leaders and followers. Of the components of TFP growth (growth rates of technical change, returns to scale and efficiency), we find that Britain's productivity slowdown can be more specifically described as a rise in inefficiency.

Why Is Productivity Slowing Down?

We examine the contribution of different explanations to the slowdown of labor productivity. Comparing the post-2005 period with the preceding decade for five advanced economies, we seek to explain a slowdown of 0.8 to 1.8 pp. No single explanation accounts for the slowdown, but we have identified a combination of factors that, taken together, account for much of what has been observed. In the countries we have studied, these are mismeasurement, a decline in the contribution of capital per worker, lower spillovers from the growth of intangible capital, the slowdown in trade, and a lower growth of allocative efficiency. Sectoral reallocation and a lower contribution of human capital may also have played a role in some countries. In addition to our quantitative assessment of explanations for the slowdown, we qualitatively assess other explanations, including whether productivity growth may be declining due to innovation slowing down. (JEL E23, E24, J24, L16, O33, O47)

Labour market flexibility as a factor in economic recovery after the COVID-19 pandemic

The COVID-19 pandemic has largely undermined most economies in the world. To a significant extent the reasons behind this economic nosedive are rooted in the sphere of labour market. The imposed restriction measures made many workers stay at home, and part of them even lost their jobs. The speed of economic recovery in different countries varied depending on how quarantine restrictions were eased. One crucial factor in this process is labour market flexibility and its ability to adapt to changing economic conditions. The purpose of the paper is to explore the relationship between the labour market flexibility and the speed of GDP recovery when the pandemic was waning and the quarantine restrictions were being removed. Methodologically, the study relies on labour economics. The methods are multivariate and logistic regression analysis. The data for the study is sourced from the World Bank and Eurostat and comprises statistics for assessing labour market flexibility and GDP in various countries for 2020–2021. The findings indicate a reverse relationship between the speed of GDP growth recovery during the post-COVID period and the share of part-time employment. Yet taking into account that part-time employment is not only an indicator of the labour market flexibility, but also reflects a general slowdown in production and unemployment, we can attach low speed of recovery to a greater weakness of an economy. The obtained results are insufficient to reject the hypothesis that a more flexible labour market accelerates the recovery of a national economy. At the same time, the study demonstrates that the West European countries generally got over the consequences of the COVID-19 crisis faster than other EU countries. The research contributes to understanding the transformation processes in the labour market under the pandemic as well as provides support for labour market policy development and implementation.

Productivity slowdown across European regions: does non-standard work matter?

ABSTRACT In recent decades, Europe has experienced a significant slowdown in productivity, accompanied by rising regional inequalities. At the same time, the fragmentation of work and the rise of non-standard forms of employment have deeply reshaped labour markets. Through the analysis of an extensive database comprising data on regional labour markets and productivity trends, we investigate the relationship between non-standard work and labour productivity dynamics in European regions from 2004 to 2018. The findings highlight that increasing non-standard employment across regions is likely to negatively affect labour productivity growth. Moreover, to some extent, the spread of non-standard jobs, especially of permanent, yet involuntary, part-time positions, might contribute to the widening of regional disparities.

Quality hours: Measuring labor input

We construct an aggregate labor input series from 1979 to 2019 to adjust for changes in the experience and education levels of the workforce using the Current Population Survey’s Outgoing Rotation Groups. We compare the cyclical behavior of labor input to aggregate hours — finding that labor input is about 9% less volatile over the business cycle and that the quality of the workforce is countercyclical. We show that the decrease in labor productivity beginning in 2004, the “productivity slowdown,” is understated by 12 percentage points when using aggregate hours instead of labor input to calculate productivity, as compared to the 1990–2003 growth rate. Moreover, 39% of the average quarterly growth rate of labor productivity can be attributed to increases in education and experience since 2004.

Electricity generation and China's GDP growth under dual control policy

To achieve the carbon neutralization plan by 2060, China implemented the “Dual Control” ( Neng Hao Shuang Kong in Chinese) policy in 2015 by limiting the energy intensity and consumption, leading to forced slowdown of energy-related production and consumptions, which in turn hampered China's economic growth. The economic impact of energy shortage has been discussed in such studies as Cheng et al., the economic consequences of the new policy remain unanswered. In this article, we select China's provincial GDP and electricity generation data from 2001 to 2021 to perform causality tests and a double log model which delineates the nexus between GDP growth and electricity generation. We find that (a) electricity generation growth Granger causes GDP growth but not vice versa, and (b) a 1% increase in electricity generation growth will lead to 0.17% increase in GDP growth. The significance of the finding is: as coal still primarily fuels electricity generation, dual control will further hinder China's economic development sans significant enhancement of electric system or expansion of renewable energy, our findings thus support an upgrade of current grid network by China Power International Development; an expansion of renewable capacity such as a proposal of 400 GW new energy project; and construction of energy storage devices such as the CGD Group thermal storage System and Yingcheng Compressed Air Energy Storage System.

Intangible assets and the productivity slowdown

Intangible assets and the productivity slowdown

Intangible assets and the productivity slowdown

Intangible assets and the productivity slowdown

Пространственный анализ инфраструктурных эффектов экономической динамики регионов России

Sustainable development of the transport system ensures the economic space unity, integrity and national security. The study hypothesises that infrastructure as an essential factor of well-being brings economic benefits to a region and determines its socio-economic growth, with effects extending beyond the region itself. Econometric and geoinformation methods were combined to conduct a spatial analysis of the impact of the capital-labour ratio, transport and telecommunication infrastructure on gross regional product per capita and labour productivity in industry, as well as to assess direct and spillover effects. The estimates revealed a statistically significant positive spillover effect of the capital-labour ratio, railway and telecommunication development indices on economic development. At the same time, negative direct effects of railway infrastructure indices on industry indicate that, in conditions of concentration of economic activity, the increasing transport system load does not correspond to its physical growth rates under heavy wear. This conclusion is confirmed by a negative spillover effect of the capital-labour ratio on labour productivity in industry in two model specifications with a direct positive effect. Providing access to networks and information resources for enterprises and population, as well as increasing technological capabilities and the speed of interaction between economic entities cause positive externalities of telecommunications for economy. Telecommunication infrastructure is a factor of industrial production growth, however, its negative spillover effects show that regions surrounded by regions with high mobile penetration rate are experiencing a slowdown in labour productivity in industry. The obtained estimates and the spatial correlation between gross regional product per capita and labour productivity in industry should be considered in programmes for financing infrastructure projects.

Walter Lippmann: an institutionalist for our times?

Abstract Although Lippmann's The Good Society was written to address the crisis in liberal democracies in the 1930s, we argue that it offers a novel and plausible institutionalist account of the productivity slowdown and the increase in the experience of insecurity that has characterised most liberal democracies over the last 20–40 years. Central to Lippmann's account is a Smithian-institutionalist model of growth where property rights have to evolve both to encourage continued levels of risk taking in the face of new uncertainties and also to offset new sources of unequal bargaining power that the very process of growth itself creates. When property rights fossilise and fail to evolve, as in the 1930s and plausibly also now, productivity growth slows down, insecurity rises, and illiberal political creeds prosper. To avoid this, Lippmann's analysis suggests that property rights have to change to re-energise risk taking and to offset the new sources of unequal bargaining power. For example, in current circumstances, new ‘positive’ property rights arising from the development of social insurance might encourage risk taking and new ‘negative’ property rights in personal data might help offset the new sources of unequal bargaining power that have emerged.

PROMOSI KESEHATAN UNTUK MENINGKATKAN PENGETAHUAN DAN KETERAMPILAN IBU HAMIL DALAM PERAWATAN PAYUDARA

The results of the Indonesian Demographic and Health Survey (SDKI) in 2010 showed that mothers who breastfeed their babies on the first day after giving birth are 50.2%. This shows that around 49,8% of mothers giving birth do not breastfeed their babies. From this data, as many as 63.6% of mothers gave birth experienced a slowdown in milk production on the first day (Perinasia, 2010). Breast care is very important during pregnancy until breastfeeding. This is because the breast is the only producer of breast milk which is the staple food for newborns, so it must be done as early as posibble. Where the production of breast milk will stimulate the milk glands through massage (Harahap, 2017). Breast care is very important in the third trimester so that complications do not occur when breastfeeding the baby later (Sari and Ernawati, 2016). Based on the result of a preliminary survey conducted with interviews with 20 pregnant women in Suku 3 Tiyuh Makarti, Tumijajar District, Tulang Bawang Barat Regency in 2021, as many as 18 people (80%) could not do breast care properly. This shows that only 2 (20%) pregnant women can perform breast care properly. The purpose of this community service is to provide education to pregnant women to be able to carry out breast care during pregnancy as a preparation for the breastfeeding process and to support the exclusive breastfeeding program. The community service method is carried out through lectures and demonstrations of breast care demonstration tools. The participants of the activity were 20 pregnant women. There was enthusiasm from the participants during the activity. Participants know the benefits and ways of breast care. For pregnant women to continue to apply breast care during pregnancy or after giving birth, and families to provide motivation and enthusiasm for pregnant women to do breast care.

Industrial dynamics in the ICT technological paradigm: The case of Portugal, 1986–2018

Following Schumpeter, several scholars have shown that development follows long-term waves. These waves are prompted by radical innovations, which, until their full potential is exhausted, spread through incremental innovations and continuous learning and imitation processes. However, the discontinuity of technological progress often goes unnoticed in current debates on productivity slowdown, declining business dynamism and increasing market concentration. Our study, based on extensive microeconomic data from 1986 to 2018, examines how the ICT revolution has influenced business dynamism in Portugal. The Bai–Perron estimates show two structural breaks in industrial dynamics: an upswing in 1993 and a downturn in 2003. Our research also shows that during the late 20th century creative destruction was mainly driven by the expanding ICT sector. After 2003, however, firm dynamics became less turbulent, with less entry and job reallocation. Moreover, despite the increasing performance of a typical high-growth young firm, the incidence of startups has declined in the new century. Our results, therefore, suggest that reduced entry and increased exit risk have likely undermined the long-term disruptive potential of transformative entrepreneurship.

GLOBAL FEED PRODUCTION DOWN SLIGHTLY IN 2023. Р.1

Global animal feed production remained steady in 2023 at 1.29 billion metric tons (BMT), but was down slightly, 2.6 million metric tons (MMT) — or 0.2% — from 2022’s. The overall lower demand for feed was due, in part, to the more efficient use of feed made possible by intensive production systems that focus on using animal nutrition, farm management and other technologies to lower feed intake while producing the same amount of protein, or more. A slowdown in the overall production of animal protein, in response to tight margins experienced by many feed and animal protein companies, also contributed to lower feed demand. Changing consumption patterns caused by inflation and dietary trends, higher production costs and geopolitical tensions also influenced feed production in 2023.

Aggregate productivity slowdown and share of temporary workers

Aggregate productivity slowdown and share of temporary workers

Reallocation and productivity in resource-rich economies

I study the firm-level dynamic response of a commodity-exporting economy to global cycles in commodity prices. I propose a heterogeneous-firms model endogenizing manufacturing productivity slowdowns through reallocation towards less productive firms. Within a given sector, commodity booms reallocate market share away from exporters because of exchange rate appreciation and away from capital-intensive firms because of the increase in the required rate of return to capital. Using microdata for Chile, the largest copper producer worldwide, I provide empirical evidence for these channels. When fed with the commodity super-cycle of 2004–2012, the calibrated model generates between 13% to 32% of the observed productivity slowdown.

21st century progress in computing

In the search for explanations for slower productivity growth since the mid-2000s in many countries, one possibility is a slower pace of progress in digital technologies. In this paper we show that the cost of computation has continued to decline rapidly, taking into account innovation in chip types and cloud computing. This is a continuation of its long-run trend; the decline has slowed since 2010, but not earlier. As firms use computational power along with other inputs including relevant human and organisational capital, to the extent that the productivity slowdown is linked to technology use the explanation is likely to lie in these other elements of the input bundle.

From organizational capabilities to corporate performances: at the roots of productivity slowdown

Abstract This paper is one of the first attempts at empirically identifying organizational capabilities—in this work concerning Italian firms. Together, it proposes new evidence on the link between capabilities and economic performances. To this aim, we employ the Indagine Multiscopo del Censimento Permanente delle Imprese (IMCPI), a survey carried out by the Italian Statistical Office (ISTAT) in 2019, covering the three-year period 2016–2018, addressing a wide range of organizational characteristics including various organizational routines, human resource management (HRM), internationalization strategies, and many others. Our contribution is threefold: first, we aim at detecting what practices and combinations of them result in underlying different capabilities; second, we propose a taxonomy of the production system, both at firm- and sector-level based on the mapping of such capabilities; and third, we study the performance outcomes of different capability taxa in terms of productivity growth.