Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/63752 
Authors: 
Year of Publication: 
2006
Series/Report no.: 
ETLA Discussion Papers No. 1015
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
We analyse the development of labour productivity and hours worked by the working-aged population in the EU25 countries and other OECD countries in 1960-2004. We emphasise the possible effects of taxes, benefits and other labour-market variables. First, we describe the trends in productivity and hours worked especially in the EU15 countries relative to the United States. Then we use both cross-section analyses of the 1995-2004 period and pooled least squares panel data analyses of the 1960-2004 period to explain the developments. Taxes and gross replacement rates do not correlate with productivity growth. Instead, productivity growth is influenced positively by investment into fixed assets, R&D and ICT, higher levels of education, and lower product market regulation. According to the results, taxes and gross replacement rates do have a negative effect on the average number of hours worked. Also the ratio between collective bargaining coverage and trade union density as well as higher product market regulation seem to have a negative effect on the number of hours worked.
Subjects: 
Productivity, growth, hours worked, convergence
JEL: 
O47
J24
O57
C33
Document Type: 
Working Paper

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