IDEAS home Printed from https://ideas.repec.org/p/euf/ecopap/0253.html
   My bibliography  Save this paper

Long-term labour productivity and GDP projections for the EU25 Member States : a production function framework

Author

Listed:
  • Giuseppe Carone
  • Cécile Denis
  • Kieran Mc Morrow
  • Gilles Mourre
  • Werner Röger

Abstract

This paper presents the results of long run labour productivity and GDP growth rate projections (until 2050) for each of the 25 EU Member States and provides a detailed overview of the forecast methodology used. These projections were undertaken in order to provide an internationally comparable macroeconomic framework against which to assess the potential economic and fiscal effects of ageing populations. This assessment was carried out as part of the work undertaken by the EU's Economic Policy Committee, in its Ageing Working Group, to project the public expenditure implications of ageing on pensions, health care, long-term care, unemployment insurance and education.

Suggested Citation

  • Giuseppe Carone & Cécile Denis & Kieran Mc Morrow & Gilles Mourre & Werner Röger, 2006. "Long-term labour productivity and GDP projections for the EU25 Member States : a production function framework," European Economy - Economic Papers 2008 - 2015 253, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0253
    as

    Download full text from publisher

    File URL: https://ec.europa.eu/economy_finance/publications/pages/publication680_en.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hansen, G D, 1993. "The Cyclical and Secular Behaviour of the Labour Input: Comparing Efficiency Units and Hours Worked," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(1), pages 71-80, Jan.-Marc.
    2. Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1325-1352, June.
    3. David A. Wise, 1989. "The Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise89-1.
    4. Quah, Danny T, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," Economic Journal, Royal Economic Society, vol. 106(437), pages 1045-1055, July.
    5. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Economic Convergence and Economic Policies," NBER Working Papers 5039, National Bureau of Economic Research, Inc.
    6. Buddelmeyer, Hielke & Mourre, Gilles & Ward-Warmedinger, Melanie E., 2004. "Recent Developments in Part-Time Work in EU-15 Countries: Trends and Policy," IZA Discussion Papers 1415, Institute of Labor Economics (IZA).
    7. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    8. Vegard Skirbekk, 2004. "Age and Individual Productivity: A Literature Survey," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 2(1), pages 133-154.
    9. Meghir, Costas & Whitehouse, Edward, 1996. "The Evolution of Wages in the United Kingdom: Evidence from Micro Data," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 1-25, January.
    10. Quah, Danny, 1995. "Empirics for Economic Growth and Convergence," CEPR Discussion Papers 1140, C.E.P.R. Discussion Papers.
    11. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    12. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    13. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    14. Mun S. Ho & Dale W. Jorgenson & Kevin J. Stiroh, 2004. "Will the U.S. productivity resurgence continue?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(Dec).
    15. Richard Disney, 1996. "Can We Afford to Grow Older?," MIT Press Books, The MIT Press, edition 1, volume 1, number 026204157x, April.
    16. David M. Cutler & James M. Poterba & Louise M. Sheiner & Lawrence H. Summers, 1990. "An Aging Society: Opportunity or Challenge?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 1-74.
    17. Buddelmeyer, Hielke & Mourre, Gilles & Ward-Warmedinger, Melanie E., 2004. "The Determinants of Part-Time Work in EU Countries: Empirical Investigations with Macro-Panel Data," IZA Discussion Papers 1361, Institute of Labor Economics (IZA).
    18. Hellerstein, Judith K & Neumark, David & Troske, Kenneth R, 1999. "Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 409-446, July.
    19. Quah, Danny, 1995. "Empirics for economic growth and convergence," LSE Research Online Documents on Economics 2136, London School of Economics and Political Science, LSE Library.
    20. Cécile Denis & Kieran Mc Morrow & Werner Röger, 2002. "Production function approach to calculating potential growth and output gaps - estimates for the EU Member States and the US," European Economy - Economic Papers 2008 - 2015 176, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    21. Andrea Bassanini & Stefano Scarpetta & Philip Hemmings, 2001. "Economic Growth: The Role of Policies and Institutions: Panel Data. Evidence from OECD Countries," OECD Economics Department Working Papers 283, OECD Publishing.
    22. Danny Quah, 1995. "Empirics for Economic Growth and Convergence," CEP Discussion Papers dp0253, Centre for Economic Performance, LSE.
    23. Giuseppe Carone, 2005. "Long-Term Labour Force Projections for the 25 EU Member States:A set of data for assessing the economic impact of ageing," Labor and Demography 0512006, University Library of Munich, Germany.
    24. Peter Downes & Aaron Drew & Patrice Ollivaud, 2003. "The OECD Medium-Term Reference Scenario: Economic Outlook No.74," OECD Economics Department Working Papers 372, OECD Publishing.
    25. Quah, Danny, 1996. "Twin peaks : growth and convergence in models of distribution dynamics," LSE Research Online Documents on Economics 2278, London School of Economics and Political Science, LSE Library.
    26. Ramón Gómez-Salvador & Ana Lamo & Barbara Petrongolo & Melanie Ward & Etienne Wasmer (ed.), 2005. "Labour Supply and Incentives to Work in Europe," Books, Edward Elgar Publishing, number 3669.
    27. Daveri, Francesco & Maliranta, Mika, 2006. "Age, Technology and Labour Costs," Discussion Papers 1010, The Research Institute of the Finnish Economy.
    28. Giuseppe Carone & Declan Costello & Nuria Diez Guardia & Gilles Mourre & Bartosz Przywara & Aino Salomaki, 2005. "The economic impact of ageing populations in the EU25 Member States," European Economy - Economic Papers 2008 - 2015 236, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    29. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    30. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Robert Holzmann & Landis MacKellar & Jana Repansek, 2009. "Pension Reform in Southeastern Europe : Linking to Labor and Financial Market Reforms," World Bank Publications - Books, The World Bank Group, number 2587.
    2. Halmai, Péter, 2011. "Válság és a potenciális növekedés az Európai Unióban [Crisis and potential growth in the European Union]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1059-1081.
    3. Jensen, Henning Tarp, 2009. "General equilibrium impact evaluation of road sector investment programs in Ghana," Conference papers 331858, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Jana Znidarsic, 2010. "Age management in Slovenian enterprises: the viewpoint of older employees," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 28(2), pages 271-301.
    5. Fritz Breuss, 2006. "Teilstudie 4: Europäische Wirtschaftspolitik: Binnenmarkt, WWU, Lissabon, Erweiterung," WIFO Studies, WIFO, number 27443.
    6. Gilles Mourre, 2009. "What explains the differences in income and labour utilisation and drives labour and economic growth in Europe? A GDP accounting perspective," European Economy - Economic Papers 2008 - 2015 354, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    7. Luke Brander & Ingo Bräuer & Holger Gerdes & Andrea Ghermandi & Onno Kuik & Anil Markandya & Ståle Navrud & Paulo Nunes & Marije Schaafsma & Hans Vos & Alfred Wagtendonk, 2012. "Using Meta-Analysis and GIS for Value Transfer and Scaling Up: Valuing Climate Change Induced Losses of European Wetlands," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(3), pages 395-413, July.
    8. Felipe, Jesus & Kumar, Utsav & Abdon, Arnelyn, 2012. "Using capabilities to project growth, 2010–2030," Journal of the Japanese and International Economies, Elsevier, vol. 26(1), pages 153-166.
    9. Andrés Rodríguez-Pose & Roberto Ganau, 2022. "Institutions and the productivity challenge for European regions," Journal of Economic Geography, Oxford University Press, vol. 22(1), pages 1-25.
    10. Vytautas Tvaronavičius & Manuela Tvaronavičiene, 2007. "Role of fixed investments in economic growth of country: Lithuania in European context," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 9(1), pages 57-64, December.
    11. Mellado, Aida Gonzalez & Gay, Stephan Hubertus & M'Barek, Robert & Ferrari, Emanuele, 2010. "Evaluation of Non-Tariff Measures for African agricultural exports to the EU in a CGE framework," Conference papers 332012, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Péter Halmai & Viktória Vásáry, 2010. "Growth crisis in the EU — challenges and prospects," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 45(5), pages 329-336, September.
    13. Michael Buchner, 2020. "Fiscal Policy in an Age of Secular Stagnation," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(3), pages 398-429, September.
    14. Serguei Kaniovski & Fritz Breuss & Thomas Url, 2006. "Teilstudie 22: Modellsimulationen ausgewählter wirtschaftspolitischer Maßnahmen," WIFO Studies, WIFO, number 27461.
    15. Alina Ștefania CHENIC (CREȚU) & Alin Ioan CREȚU & Laurențiu TEȘCAN, 2018. "A Long Term Analysis of Two Undeniable Realities of the XXI Century - Global Economic Crisis and Demographic Aging," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 19(2), pages 196-212, May.
    16. Halmai, Péter, 2015. "Az európai növekedési potenciál eróziója és válsága [Erosion and crisis in European growth potential]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 379-414.
    17. Herman de Kwaatsteniet, 2011. "Demand Variability in Supply Chains: The Influence of Global developments and Globalization on the Local Dutch Steel Industry," Working Papers 2011/32, Maastricht School of Management.
    18. Barrios, Salvador & Burgelman, Jean-Claude, 2007. "Information and Communication Technologies, Market Rigidities and Growth: Implications for EU Policies," MPRA Paper 5838, University Library of Munich, Germany.
    19. Michael Donadelli & Vahid Mojtahed & Antonio Paradiso, 2015. "Technological Progress, Investment Frictions and Business Cycle: New Insights from a Neoclassical Growth Model," Working Papers LuissLab 15119, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    20. Grzegorz Jedrzejczak, 2016. "Aging Poland: Can the Doomsday Scenario Be Avoided? (Starzejaca sie Polska. Czy mozna uniknac scenariusza katastrofy? )," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 14(59), pages 60-72.
    21. Péter Halmai & Viktória Vásáry, 2010. "Real convergence in the new Member States of the European Union (Shorter and longer term prospects)," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 7(1), pages 229-253, June.
    22. P. Halmai & V. Vásáry, 2011. "Crisis and economic growth in the EU," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 61(4), pages 465-485, December.
    23. Heidler, Matthias & Müller, Christoph & Weddige, Olaf, 2009. "Measuring accrued-to-date liabilities of public pension systems: Method, data and limitations," FZG Discussion Papers 37, University of Freiburg, Research Center for Generational Contracts (FZG).
    24. Fritz Breuss, 2006. "Warum wächst die Wirtschaft in Österreich rascher als in Deutschland?," WIFO Working Papers 280, WIFO.
    25. Péter Halmai & Viktória Vásáry, 2012. "Convergence crisis: economic crisis and convergence in the European Union," International Economics and Economic Policy, Springer, vol. 9(3), pages 297-322, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kieran McMorrow & Werner Roger, 2011. "Catching-up Prospects After the Crisis for the EU’s CESEE Region," Chapters, in: Ewald Nowotny & Peter Mooslechner & Doris Ritzberger-Grünwald (ed.), Post-Crisis Growth and Integration in Europe, chapter 4, Edward Elgar Publishing.
    2. Stephen Dobson & Carlyn Ramlogan & Eric Strobl, 2006. "Why Do Rates Of Β‐Convergence Differ? A Meta‐Regression Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(2), pages 153-173, May.
    3. FE, Doukouré Charles, 2010. "Réduction de Droits de Douane et Convergence Réelle dans l'UEMOA [Tariffs Reduction and Real Convergence in WAEMU]," MPRA Paper 26763, University Library of Munich, Germany.
    4. Cem Ertur & Julie Le Gallo & Catherine Baumont, 2006. "The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?," International Regional Science Review, , vol. 29(1), pages 3-34, January.
    5. Kutub Uddin & Zohurul Anis & Muhammad Jakir Hossain & Zohurul Islam Shamol, 2016. "Examining Convergence in Per Capita Agricultural Production across Selected Asian countries," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(10), pages 178-194, October.
    6. Iancu, Aurel, 2007. "The Question of Economic Convergence - first part -," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 4(3), pages 5-18, September.
    7. Leone Leonida & Leone Leonida & Daniel Montolio, 2003. "Public Capital, Growth and Convergence in Spain. A Counterfactual Density Estimation Approach," Working Papers 2003/3, Institut d'Economia de Barcelona (IEB).
    8. Iancu, Aurel, 2009. "Real Economic Convergence," Working Papers of National Institute for Economic Research 090104, Institutul National de Cercetari Economice (INCE).
    9. Andrew T. Young & Matthew J. Higgins & Daniel Levy, 2004. "Heterogeneity in Convergence Rates and Income Determination across U.S. States: Evidence from County-Level Data," Working Papers 2004-1, Bar-Ilan University, Department of Economics.
    10. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    11. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    12. repec:ath:journl:tome:34:v:2:y:2014:i:34:p:13-21 is not listed on IDEAS
    13. Wilfried Koch, 2005. "Neighborhood Effects In The Solow Model With Spatial Externalities," ERSA conference papers ersa05p723, European Regional Science Association.
    14. Young, Andrew T. & Higgins, Matthew J. & Levy, Daniel, 2013. "Heterogeneous Convergence," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 120(2), pages 238-241.
    15. Mădălina AVRAM & Constantin POSTOIU, 2016. "Territorial patterns of development in the European Union," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(606), S), pages 77-88, Spring.
    16. Cristina D. Checherita, 2009. "Variations on economic convergence: The case of the United States," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 259-278, June.
    17. repec:cpn:umkeip:2012:v4:p:167-186 is not listed on IDEAS
    18. Penna, Christiano Modesto & Linhares, Fabricio Carneiro, 2013. "Há controvérsia entre análises de beta e sigma-convergência no Brasil?," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 67(1), April.
    19. repec:fgv:epgrbe:v:67:n:1:a:6 is not listed on IDEAS
    20. Leone Leonida & Daniel Montolio, 2001. "Convergence and Inter-Distributional Dynamics among the Spanish Provinces. A Non-parametric Density Estimation Approach," Working Papers 2001/7, Institut d'Economia de Barcelona (IEB).
    21. Burnett, J. Wesley, 2016. "Club convergence and clustering of U.S. energy-related CO2 emissions," Resource and Energy Economics, Elsevier, vol. 46(C), pages 62-84.
    22. Lehmann, Hartmut & Silvagni, Maria Giulia, 2013. "Is There Convergence of Russia's Regions? Exploring the Empirical Evidence: 1995–2010," IZA Discussion Papers 7603, Institute of Labor Economics (IZA).
    23. Cornwell, Christopher Mark & Wächter, Jens-Uwe, 1999. "Productivity convergence and economic growth: A frontier production function approach," ZEI Working Papers B 06-1999, University of Bonn, ZEI - Center for European Integration Studies.

    More about this item

    Keywords

    labour productivity; GDP projections; ageing populations; public expenditure; pensions; health care; long-term care; unemployment; education; Carone; Denis; Mc Morrow; Mourre; Röger;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:euf:ecopap:0253. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ECFIN INFO (email available below). General contact details of provider: https://edirc.repec.org/data/dg2ecbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.