Working Paper: CEPR ID: DP2861
Authors: Jonathan Temple
Abstract: Most of the countries of Western Europe grew at unprecedented rates from the late 1940s until the early 1970s. Another feature of this period was dramatic structural change, as employment shifted from agriculture to manufacturing and services. This Paper uses growth accounting to measure the direct contribution of structural change to aggregate productivity growth. The conventional accounting framework is extended and then applied to Western Europe and the USA for the period 1950-90. The Paper quantifies the importance of structural change in explaining the Golden Age, the productivity slowdown, and the cross-country variation in post-war growth rates.
Keywords: Growth Accounting; Labour Reallocation; Structural Change
JEL Codes: O42; O52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labor reallocation from agriculture to higher productivity sectors (J89) | Productivity growth in Western Europe (1950-1979) (O52) |
| Labor reallocation (J29) | Annual growth rates in Italy and West Germany until 1973 (N14) |
| Reduced scope for labor reallocation (F66) | Productivity slowdown post-1973 (O49) |