Growth and Crisis
Edited by Matilde Mas and Robert Stehrer
Chapter 5: Productivity Performance in Three Small European Countries: Austria, Belgium and the Netherlands
5. Productivity performance in three small European countries: Austria, Belgium and the Netherlands Chantal Kegels, Michael Peneder and Henry van der Wiel 5.1 INTRODUCTION The launch of the Lisbon Strategy in 2000 was strongly motivated by the observation of a declining trend in European labour productivity growth over the preceding decade. Labour productivity growth is important since it affects our wages and living standards. From World War II up to 1995, Europe’s productivity growth was higher than that of the United States (US), linked to a process of catching-up to the US productivity level. However, from 1995 to 2007, labour productivity growth of the majority of European Union (EU) countries gradually slowed down, whereas it substantially accelerated in the US. Hence, the EU ceased to converge to the US level after 1995. The crisis years after 2007 mark an even sharper contrast between the EU and the US. Labour productivity growth was falling by almost 1 per cent on average in the EU, while US labour productivity increased, with more than 1.5 per cent. However, this disappointing development for Europe as a whole does not necessarily apply to all European countries. Actually, the period after the mid-1990s marks a period of increasing divergences in productivity growth patterns inside the EU. The productivity performances of the Scandinavian countries are, for example, in line with those of the US but are far from the Spanish or Italian developments. What about the small countries of Europe: Austria, Belgium and the Netherlands? This study...
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