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Sectoral change and labour productivity growth during boom, bust and recovery in Central and Eastern Europe

Author

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  • Andres Kuusk

    (University of Tartu)

  • Karsten Staehr

    (Tallinn University of Technology)

  • Uku Varblane

    (University of Tartu)

Abstract

This paper assesses the extent of structural or sectoral change and its importance for aggregate productivity growth during times of boom, bust and recovery. The analysis covers 10 EU countries from Central and Eastern Europe over the years 2001–2012. The reallocation of labour across sectors was substantial during the boom, very extensive in 2009 at the depth of the crisis and modest in the subsequent recovery period. The contribution of sectoral change to aggregate productivity growth is computed using various decomposition methods. Changes in labour productivity within sectors play the dominant role for aggregate productivity growth, while reallocation of labour between sectors is less important. This pattern is found through most of the sample period despite large differences in the extent of sectoral change during the boom, crisis and recovery.

Suggested Citation

  • Andres Kuusk & Karsten Staehr & Uku Varblane, 2017. "Sectoral change and labour productivity growth during boom, bust and recovery in Central and Eastern Europe," Economic Change and Restructuring, Springer, vol. 50(1), pages 21-43, February.
    • Handle: RePEc:kap:ecopln:v:50:y:2017:i:1:d:10.1007_s10644-016-9180-3
    DOI: 10.1007/s10644-016-9180-3
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    More about this item

    Keywords

    Labour productivity; Structural change; Reallocation; Productivity decomposition;
    All these keywords.

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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