Boosting European Competitiveness
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Boosting European Competitiveness

The Role of CESEE Countries

Edited by Marek Belka, Ewald Nowotny, Pawel Samecki and Doris Ritzberger-Grünwald

In the global financial crisis, competitiveness gaps between Euro area countries caused additional strain. This book discusses the various dimensions of competitiveness, with a special focus on Central, Eastern and Southeastern Europe. With products becoming ever more technically sophisticated and global interconnectedness on a relentless rise, quality, customer orientation and participation in production networks are as important as relative costs and prices. For Europe to proceed with convergence and to resist global competitive pressures, policies to boost productivity and innovation are therefore vital.
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Chapter 11: Do jobs created in CEE countries result in higher productivity?

Michał Gradzewicz


Most of the countries in the world are experiencing a productivity slowdown, for different reasons. With regard to the United States (US), the literature points to almost polar reasons for this phenomenon: the end of the information technology-driven boom of the 1990s (Fernald 2015), or just a drop-off in new business formation and in productivity-enhancing investment by firms (Reifschneider et al. 2015). A common feature of these explanations is that they rely on technology or investments developments, reflecting the fact that basic economic theory says labour productivity is a function of technological progress and capital deepening. In this chapter, my point of departure is somewhat different: I ask whether an additional person employed has lower than average productivity, thus contributing to a productivity slowdown. To this end I show how the structure of employment has evolved in selected Central and Eastern European (CEE) and euro area (EA) countries, to assess whether the structure evolves in the direction of higher- or lower-productivity jobs.

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