A comparative analysis of productivity and productivity factors in the EU and USA over the period 1995 - 2015

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Volume Title

School of Business | Bachelor's thesis

Date

2017

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Mcode

Degree programme

(Mikkeli) Bachelor’s Program in International Business

Language

en

Pages

58

Series

Abstract

This thesis will focus on comparative study of labor productivity growth and level in the United States and the European Union from 1995 until 2015. It aims find factors behind labor productivity growth differential between the US and the, especially from the European perspective, due to their lower level of productivity compared to the United States. The analysis will focus on comparing the effect of three major factors: ICT, labor regulation and general market characteristics (e.g. size and homogeneity of consumers). These factors influence significantly productivity growth. Especially ICT has been one of the largest contributors in the US and relatively poorly managed in the EU. Therefore, studying how the amount of ICT investing (e.g. Fernandez and Palazuelos, 2009) and adaptation of ICT (e.g. Miller and Atkinson, 2014) explain partially the differential between the economies is important. Along with ICT, labor regulations are another reason for the differential. European labor market is considered rigid and inflexible compared to the US labor market, which increases the differential through costs and restriction on hiring, firing and reallocation (e.g. Henrekson, 2014). Therefore, this thesis focuses on explaining these productivity factors and presenting policy recommendations to overcome these rigidities.

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Thesis advisor

Zieba, Marta

Keywords

productivity, labor, ICT, labor regulations, labor productivity, rigidity

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