Slide 2: Introduction
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Welcome to our presentation on human capital and labour markets, focusing on why productivity is
slowing down.
We'll discuss various factors, including education, ageing, migration, leisure technology, and labour
market institutions.
Our analysis is based on the working paper "Why is productivity slowing down?" by Ian Goldin,
Pantelis Koutroumpis, François Lafond, and Julian Winkler.
Slide 3: Education and Skills
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A decline in human capital growth is rarely seen as an explanation for the slowdown of productivity.
However, a mismatch between supply and demand of skills could contribute to the global
slowdown.
Skill bias in jobs pushes middle earners with education into lower income jobs and the gig economy,
as their old jobs become automated.
Slide 4: Ageing
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Selection bias and generational effects make it difficult to determine the true impact of age on
productivity.
Studies fail to find any clear correlation between ageing and productivity.
However, older societies may pursue capital-biased technical change, leading to higher productivity
through faster adoption of automation.
Slide 5: Migration
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Immigration has been linked to a slowdown in labour productivity growth by increasing the supply
of labour and potentially reducing investment in capital equipment.
However, immigrants are also known to be more entrepreneurial and innovative.
Overall, changes in the share of foreign-born employees are not large enough to significantly affect
TFP growth rates in selected countries, making migration an insufficient explanation for the labour
productivity slowdown.
Slide 6: Leisure Technology
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Improved leisure technologies lead to increased time spent on leisure activities, which could reduce
participation in the labour force.
Since 1978, productivity during leisure time has been decreasing.
However, the same technology has enabled hybrid working and increased flexibility, making the
overall impact on productivity unclear.
Slide 7: Labour Market Institutions - Labour Hoarding
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Labour hoarding is a practice where firms keep workers on the payroll despite falling demand to
avoid future re-hiring costs.
This contributes to a slowdown by maintaining labour inputs constant despite dropping output.
It has been found to be a leading explanation for the differences in labour productivity following the
financial crisis across European countries.
Slide 8: Labour Market Institutions - Wage Flexibility and Barriers to Work Mobility
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Higher wage flexibility leads to workers accepting lower real wages, and unemployment recovers
quickly.
Decline in job reallocation due to increased regulation may decrease productivity growth.
Non-compete agreements and no-poaching agreements have a noticeable effect on wages, but
concrete evidence regarding productivity is lacking.
Slide 9: Labour Market Institutions - Digital Labour Markets
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Digital labour markets have mixed effects on productivity.
Gig economy can be detrimental due to lower rates of investment in skill accumulation.
However, these markets can also improve utilization rates for services, enhance skill matching, and
reduce hiring costs.
Slide 10: Summary and Conclusion
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Education: Not a significant explanator, but technology has disrupted labour markets and may
impact TFP growth.
Ageing: Not uniform across all countries, so not a complete explanator.
Leisure technologies: Under-researched and unclear impact on productivity.
Labour market changes and digital markets: Could be a plausible explanation.
Discrimination: A slowdown in the reduction of discrimination may have contributed to the
productivity slowdown.
Better allocation of human resources was responsible for between 20-40% of the increase in market
output per person between 1960 and 2010
In conclusion, while there are several factors affecting productivity growth, none can solely explain the global
slowdown. The interplay between education and skills, ageing populations, migration, leisure technology, and labour
market institutions all contribute to the observed trends. It is essential to acknowledge the complex nature of
productivity growth and consider multiple factors when trying to understand and address the productivity
slowdown. Further research is needed to evaluate the impact of these factors and develop effective policies to boost
productivity in the future.