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Digital transformation and its impact on labour productivity: A multi-sector perspective

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  • Falck, Elisabeth
  • Röhe, Oke
  • Strobel, Johannes

Abstract

In recent years, there has been a controversial debate on how the rapid diffusion of digital technologies affects labour productivity in advanced economies. Using a multi-sector dynamic general equilibrium model, we show that cumulative labour productivity growth in the United States, Germany and France over the period from 1996 to 2020 would have been about half as high without the efficiency gains from the sectors producing digital goods - despite their relatively small size in terms of gross value added. This is not only because TFP growth in the digital sectors is exceptionally high, but also because other sectors benefit from these efficiency improvements via production linkages.

Suggested Citation

  • Falck, Elisabeth & Röhe, Oke & Strobel, Johannes, 2024. "Digital transformation and its impact on labour productivity: A multi-sector perspective," Discussion Papers 28/2024, Deutsche Bundesbank.
    • Handle: RePEc:zbw:bubdps:300703
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    More about this item

    Keywords

    dynamic general equilibrium model; sectoral linkages; production network; digitalisation;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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