Stefano Fachin and Andrea Gavosto
The main aim of this paper is to examine labour productivity trends in Italy over the period 1981‐2004.
Abstract
Purpose
The main aim of this paper is to examine labour productivity trends in Italy over the period 1981‐2004.
Design/methodology/approach
To this end, relying on recent developments in the analysis of non‐stationary dependent panels, the paper develops a new method for estimating total factor productivity (TFP) trends.
Findings
The conclusions confirm the view that the recent decline in Italian labour productivity growth is mostly due to a widespread fall in TFP growth.
Research limitations/implications
The main assumption underlying the proposed TFP estimation method is that technology growth is driven by a single trend common to all units included in the panel (industries, regions or countries).
Originality/value
The paper provides two distinct contributions: empirically, it provides robust evidence that TFP slow‐down is the main cause of recent negative trends in labour productivity in Italy. Methodologically, the paper proposes an approach to estimating TFP that enjoys several advantages: only basic data for input and output flows are needed, the non‐stationary nature of the data is explicitly taken into account, and confidence intervals for TFP growth can be computed. This method can thus be easily applied to many routinely available datasets, to either corroborate existing growth accounting estimates or to obtain previously unavailable estimates.
Details
Keywords
Enrico Marelli and Francesco Pastore
The purpose of this paper is to introduce the special issue on “Labour, productivity and growth”.
Abstract
Purpose
The purpose of this paper is to introduce the special issue on “Labour, productivity and growth”.
Design/methodology/approach
The paper discusses the articles in the special issue, which investigate the main theme – labour, productivity and growth – from different points of view by employing a variety of econometric methods. These include improvement of the evaluation of the impact of labour market flexibility on economic performance, analysis of the macroeconomic law of decreasing returns to labour, a new panel co‐integration method, and a reinterpretation of co‐integration analysis to assess the impact of incomes policy. Institutional variables, in particular the system of industrial relations, are duly considered.
Findings
The papers in the special issue highlight different causes of sluggish economic (productivity) growth in Europe, in the light of not only traditional macroeconomic variables, such as total factor productivity and labour market flexibility, but also such factors as neo‐corporatist industrial relations and management practices, which are generally neglected in the literature.
Originality/value
The paper introduces a number of articles proposing innovations in the interpretation and application of a wide range of theoretical approaches and econometric methodologies. It also discusses several policy suggestions for fighting sluggish productivity growth, including investment in research and development, human capital, flexicurity, innovative industrial relations practices and high‐performance workplace practices also considered capable of affecting macroeconomic performance.