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on Efficiency and Productivity |
| By: | Mahlberg, Bernhard; Mara, Isilda; Prskawetz, Alexia; Gerstner, Isabel |
| Abstract: | The aim of this study is to estimate the age–productivity profile of Austrian firms using a linked employer–employee dataset for the years 2013–2022. The OLS and FE estimates indicate a highly significant relationship between workforce age structure and labour productivity. Across both estimation methods, we find an inverted U-shaped age–productivity profile. We also account for capital intensity and the share of automation-related assets (ADRA). The estimation results show that firms with greater capital intensity and higher levels of automation consistently exhibit higher productivity across the distribution. In addition, the marginal effect of the share of ADRA-related capital is greater than that of the agerelated variables. These findings have important implications for both firm strategy and public policy, highlighting the role of technology diffusion, education, and potentially organisational change in sustaining productivity in ageing societies. The empirical strategy is complemented by panel data methods and robustness checks to account for persistence, unobserved heterogeneity, and potential reverse causality. |
| Keywords: | Age-productivity profile, Labour productivity, Automation-related assets, Principal component analysis |
| JEL: | D24 J14 J24 J82 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:tuweco:342377 |
| By: | W. Addessi; I. Etzo; A. Tidu; S. Usai |
| Abstract: | Given the Cultural and Creative Industries' (CCIs) growing contribution to Italy's GDP and their fragmented structure of small-medium enterprises, this paper explores the impact of agglomeration on Italian province productivity. To overcome the Modifiable Areal Unit Problem (MAUP) inherent in administrative boundaries, we employ a distance-based specialization index to assess whether firms benefit from operating in close proximity to peers within the same industry. We replicate this analysis at both the domain level (Cultural vs Creative) and the macro-sector level (e.g., Architecture and Design, Performing Arts). Our findings reveal a positive effect of agglomeration on Total Factor Productivity (TFP) across all levels of aggregation. However, when utilizing value added per employee as a metric for productivity, the positive impact is exclusively significant at the macro-sector level, dissipating at more aggregated domain classifications. These results underscore the necessity of facilitating co-location policies for CCIs, particularly given their SME-dominated nature. |
| Keywords: | Cultural and Creative Industries, spatial concentration, agglomeration economies, total factor productivity, M-index |
| JEL: | D24 L25 R12 Z11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202612 |
| By: | Aakash Kalyani; Serdar Ozkan; Nicholas Sullivan |
| Abstract: | The way firms discuss productivity improvements on earnings calls increasingly involves references to AI, even if its effects aren’t clear in aggregate data. |
| Keywords: | artificial intelligence (AI); earnings calls; productivity |
| Date: | 2026–07–31 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:103585 |
| By: | Niki Barbas; Anna Valero; John Van Reenen |
| Abstract: | We compare standard productivity estimates of UK output per worker derived from the Labour Force Survey (LFS) with newly released estimates based on more reliable "Real Time Information" (RTI) administrative data. LFS-based productivity measures have been flat since 2024 Q3, a continuation of disappointing longer-term trends since the Global Financial Crisis. By contrast, RTI-based productivity estimates point to a meaningful productivity pickup. Between 2024 Q3 and 2026 Q1, our baseline administrative estimates indicate that productivity increased by 2.4 per cent, compared with just 0.3 per cent under the LFS-based measure. A divergence in labour input explains these differences. While the LFS suggests that labour input increased by 1.8 per cent between 2024 Q3 and 2026 Q1, administrative measures indicate a small decline. The difference in the series is explained by employees, rather than the harder to measure group of self-employed. Between 2024 Q3 and 2026 Q1, the LFS recorded an increase of 377, 000 employees, while RTI recorded a decline of 133, 000 employees. While some of the divergence could in principle reflect definitional and coverage differences between survey and administrative data, we believe that it is due to sampling challenges affecting the LFS, particularly during and since the pandemic. Given that administrative data currently provide the most reliable measure of employee growth, productivity estimates using such data provide a more accurate picture of recent developments. |
| Keywords: | national productivity, employment measurement, administrative data, Labour Force Survey |
| Date: | 2026–07–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepops:74 |
| By: | Jiang, Sheila; Rebucci, Alessandro; Zhang, Gang |
| Abstract: | We develop and estimate a new model of endogenous growth in bank efficiency and firm productivity in which banks adopt technology embedded in capital goods produced by entrepreneurs, and agents choose whether to become workers or capital-good-producing entrepreneurs. In this framework, bank efficiency influences firm productivity by affecting agents' occupational choices, while firm productivity affects bank efficiency through the relative price of capital goods. We find that increasing technology adoption in the banking system to the level in the top half of the distribution in the data accelerates the economy's long-term growth from 2.0% to 2.17%. We also find that empirical evidence based on U.S. bank, metropolitan, and state-level data is consistent with the critical mechanisms of our model. |
| Keywords: | Growth; Productivity |
| JEL: | G21 O3 O4 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20020 |
| By: | Pajarinen, Mika; Ylhäinen, Ilkka |
| Abstract: | Abstract We examine how entrepreneurial capital—wealth, experience, skills, and networks—released through acquisitions is reallocated to new and existing firms. We combine Finnish administrative data on firm exits, owners, board members and executives, and financial statements. We identify acquisitions from worker flows and estimate the performance of destination firms using difference-in-differences and doubly robust augmented inverse probability weighting (AIPW) estimators. Entrepreneurs who sell their firms often continue in active ownership, board, and executive roles, especially in existing firms. Acquisition counterparties—acquirers and merger partners—experience substantially faster sales growth than control firms, but their labor productivity develops less favorably, particularly in the first post-acquisition years. Profitability improves relative to controls in the existing firms that former owners join. Newly founded destination firms have substantially higher sales than control firms. We find no evidence that reallocated entrepreneurial capital generates systematic productivity gains or increases the likelihood of equity financing relative to control firms. |
| Keywords: | Mergers and acquisitions, Entrepreneurial capital, Serial entrepreneurship, Firm dynamics, Firm Performance, Difference-in-differences |
| JEL: | C23 G32 G34 L25 L26 |
| Date: | 2026–08–03 |
| URL: | https://d.repec.org/n?u=RePEc:rif:report:179 |
| By: | O'Mahony, Mary; Viernes, Mechelle; Weale, Martin |
| Abstract: | Productivity is generally defined as a measure of the amount of output generated per unit of input. In many countries, public sector productivity has been assumed to be zero in the national accounts. The output of the government sector has been measured as equal in value to the total value of inputs. This output=input convention has increasingly come under scrutiny in recent years. The challenge is to devise alternative estimates based on output measurement in a public sector context – where collective services are provided and where there is, in most instances, no market transaction in services provided to individuals (Boyle, 2006). This report aims to provide a summary of approaches to defining and measuring public sector productivity. The first part of the paper begins with a review of international practices for a few national statistical institutes (NSIs) and Productivity Commissions where information was readily available from websites. This is followed by more general discussions of issues that impact on public sector productivity. We first consider the organization of public sector production which could feed into measurement. This draws heavily on a report reviewing measurement for the police, undertaken by The Productivity Institute (TPI). We then consider the question of weighting of outputs and quality adjustments. Next, we look at approaches that are based on outcomes rather than outputs and how to incorporate preventative measures. The final part contains some recommendations for future research. |
| Keywords: | public sector productivity; input; measurement of output; quality adjustment; health; education; social security |
| JEL: | D24 H10 H11 H30 H40 H51 H52 H53 H55 H56 |
| Date: | 2025–03–05 |
| URL: | https://d.repec.org/n?u=RePEc:eoe:escoet:escoe-tr-26 |
| By: | Comin, Diego; Lashkari, Danial; Mestieri, Marti |
| Abstract: | We document the structural transformation of innovation using historical patent data since the 1850s, along with R&D expenditure and TFP growth for the post-war period. Over time, innovation has shifted from agricultural sectors to manufacturing, and, more recently, to services. We develop and quantify a multi-sector semi-endogenous growth model of structural change in innovation and production, incorporating the classical demand-pull and technology-push drivers of innovation. Sectors differ in their innovation technologies, and the extent to which they benefit from knowledge spillovers (technology-push). Nonhomothetic demand shifts the market shares toward income-elastic sectors along the growth process (demand-pull). A calibrated version of our model replicates the structural transformations of innovation and production observed in the US data. Using the model, we evaluate the future impact of Baumol’s disease on aggregate productivity and find it to be minimal. Our results suggest that aggregate productivity growth may recover in the coming decades as the service sector becomes increasingly innovation-driven. |
| Keywords: | Innovation; Productivity |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20273 |
| By: | Manova, Kalina; Moxnes, Andreas; Perelló, Oscar |
| Abstract: | This paper examines intermediation in production networks to unpack the firm attributes and matching costs that govern firm-to-firm networks and the gains from trade. Exploiting rich customs data for Chile, we show that exporters of all sizes use intermediaries, mix trade modes across buyers, and set lower prices on intermediated flows. We rationalize these facts in a model of network formation with suppliers of heterogeneous productivity and matchability, buyers of heterogeneous productivity, and intermediaries that reduce matching costs for a brokerage fee. Empirical evidence on trade activity across firms and countries corroborates the model, and informs how geographic distance, logistics and customs efficiency, formal institutions, and cultural-linguistic similarity shape network costs. Model estimation reveals that sellers’ attributes are negatively correlated, such that intermediaries enable highly productive sellers with low matchability to reach smaller buyers. This amplifies the welfare gains from intermediation due to wider and deeper network connectivity. |
| Keywords: | Production networks; Intermediation; Productivity; Matching costs |
| JEL: | F10 F12 F14 F23 L11 L14 L81 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20044 |
| By: | Auerbach, Jan; Keller, Elisa; Neira, Julian; Singhania, Rish |
| Abstract: | Foreign-born and US-born workers sort differently across space. This paper examines how spatial sorting affects US productivity by disentangling the roles of worker productivity and local amenities. Using data on labor market outcomes and new measures of user cost of capital across regions, we identify spatial distributions of local amenities and productivity by worker birthplace, including birth state for US-born workers, in a general form under minimal assumptions. We use a productivity decomposition as a diagnostic tool to isolate channels through which immigration contributes to aggregate TFP. The decomposition applied to US Census data from 1980 to 2018 reveals that amenity-induced spatial sorting is the primary driver of TFP gains from immigration, with the largest share coming from foreign-born workers mitigating the birth-state bias of US-born workers. Counterfactual exercises show that the birth-state-bias-mitigation channel accounts for at least 90% of TFP gains from immigration. |
| Keywords: | Productivity; Spatial sorting |
| JEL: | O4 E24 J24 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20197 |
| By: | Hausman, Naomi; Rigbi, Oren; Weisburd, Sarit |
| Abstract: | Student use of Artificial Intelligence (AI) in higher education is reshaping learning and redefining the skills of future workers. Using student-course data from a top Israeli university, we examine the impact of generative AI tools on academic performance. Comparisons across more and less AI-compatible courses before and after ChatGPT’s introduction show that AI availability raises grades, especially for lower-performing students, and compresses the grade distribution, eroding the signal value of grades for employers. Evidence suggests gains in AI-specific human capital but possible losses in traditional human capital, highlighting benefits and costs AI may impose on future workforce productivity. |
| Keywords: | ChatGPT |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20206 |
| By: | Radoslaw Stefanski (University of St Andrews; University of Stavanger) |
| Abstract: | Long-run growth is driven by new ideas, yet the cultural environment shaping their production is difficult to measure over time. We use large language models to read 23, 000 books from the Western canon and score whether each endorses, rejects, or merely depicts six dimensions of culture. We accumulate the scores into inherited stocks and summarize them with an Innovation Wedge measuring cultural resistance to new ideas. Between 1000 and 1920 the wedge falls by 51 percent. Blinded expert readings and modern surveys validate the measure. An independent 5, 000-book archive reproduces the decline. In a calibrated semi-endogenous growth model, the falling wedge raises 1920 productivity to 1.78 times its counterfactual level, explains two-thirds of the first sustained acceleration in productivity growth between 1500 and 1700, and accounts for 38.7 percent of productivity growth in 1920. |
| Keywords: | culture and growth; ideas production; growth accounting; innovation barriers; text as data |
| JEL: | O41 O31 N13 Z10 |
| Date: | 2026–07–23 |
| URL: | https://d.repec.org/n?u=RePEc:san:econdp:2602 |
| By: | Alice Albonico; Marco Guerzoni |
| Abstract: | Is the aggregate productivity slowdown in the U.S. driven by a decline in successful innovation? This paper addresses this question using a medium-scale DSGE model with endogenous technology growth. The model distinguishes between two innovation channels: a spillover channel, which governs the efficiency with which aggregate R&D advances the technological frontier, and a difficulty channel, which governs the probability that sectoral R&D efforts successfully generate innovation. We estimate the model on U.S. macroeconomic and R&D data over the period 1984-2019, using macroeconomic observables and incorporating a patent-text-based measure of technological creativity that is informative about innovation probability. The results show that spillover shocks are the main drivers of short and medium run fluctuations in TFP growth, while R&D difficulty shocks mainly explain the probability of successful innovation. Once creativity data are included, the estimated difficulty shock becomes less volatile and more persistent, suggesting that innovation difficulty is a slow moving force shaping successful innovation. However, its quantitative contribution to TFP fluctuations remains substantially smaller than that of spillover shocks, although it matters in specific episodes. |
| Keywords: | Innovation Difficulty, Endogenous growth, R&D investments, Bayesian estimation |
| JEL: | E3 O3 O4 C11 C13 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:580 |
| By: | Walid Faris; Mr. Etibar Jafarov; Umang Rawat |
| Abstract: | Across much of the Middle East and Central Asia (ME&CA), market competition remains weaker than in other emerging markets, holding back productivity and income growth. Using firm-level data from Orbis for 2002–2021, this paper studies the evolution of market competition in ME&CA economies and examines how trade policy and institutions shape competitive dynamics. We find that market power remains substantial and uneven across ME&CA, with particularly high markups in resource-intensive activities, selected service sectors, and—more recently—manufacturing in the Caucasus and Central Asia (CCA). Higher tariff protection is systematically associated with faster growth in markups, indicating that trade barriers weaken competitive pressure, while improvements in competition policy, anti-corruption frameworks, and property rights are linked to declining market power and hence increasing competition. Although productivity gaps remain large and persistent, stronger competition is associated with faster firm-level productivity growth and higher GDP per capita growth, with these effects particularly pronounced in CCA economies. Overall, the findings highlight the importance of policies aimed at reducing trade barriers and strengthening institutional and competition policy frameworks to foster competition, raise productivity, and support long-term income growth in the ME&CA region. |
| Keywords: | market power; markups; total factor productivity; tariffs; competition policy; Middle East and Central Asia; productivity gaps |
| Date: | 2026–07–10 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/143 |
| By: | Pablo Filippi; Ryan Kim; Ms. Nan Li; María Jesús Pérez; Younghun Shim |
| Abstract: | We study how commodity booms affect productivity using administrative microdata from Chile combining firm exports by product and destination, employer-employee records, and firm-to-firm production networks. Exploiting differential Chinese demand across Chilean commodity products, we measure firms’ exposure to the boom and trace its effects on productivity and resource allocation. We find three mechanisms. First, more exposed firms experience larger revenue increases but no differential productivity gains, channeling revenues into wages and materials. Second, among exposed firms, low-productivity firms expand employment while high-productivity firms do not, hiring workers from more productive employers. Third, domestic suppliers with greater indirect exposure show larger sales and productivity gains. We develop a model with heterogeneous export wedges and labor market frictions in which commodity booms can reduce sectoral productivity by exacerbating input misallocation, consistent with firm-level and aggregate evidence. Calibrated to Chile, this mechanism explains half of the mining TFP decline from 2005 to 2013. |
| Keywords: | Commodity booms; Misallocation; Productivity; Micro-level Data; Labor reallocation. |
| Date: | 2026–07–31 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/163 |
| By: | Principe, Francesco; van Ours, Jan C. |
| Abstract: | We study labor market dynamics of workers in a highly competitive industry, focusing on the relationship between workers' age, wages, and productivity. Our analysis uncovers an inverse U-shaped relationship. While some wage adjustments occur within the current firm, job mobility plays a crucial role in shaping wage trajectories. There is assortative matching with highly productive workers moving to highly productive firms, while less productive workers gravitate towards less productive firms. Our findings suggest that both in-firm wage progression and wage growth via job mobility contribute to a close alignment between wages and productivity throughout workers' careers. |
| Keywords: | Productivity; Job mobility |
| JEL: | J31 J62 Z22 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20054 |
| By: | Arenas, Andreu (University of Barcelona (IEB, IPERG)); Bosch, Marc (Ivà lua); Frias, Nerea (National Institute of Economic and Social Research) |
| Abstract: | We estimate the effect of work from home (WFH) on public-sector productivity by evaluating a mandatory return-to-office (RTO) policy in the Catalan judiciary. Leveraging cross-court variation in pre-mandate WFH intensity, difference-in-differences estimates show that terminating WFH reduced procedural output by 5.6 percent, with no offsetting changes in document quality or absenteeism. Evidence from a multi-stakeholder survey suggests a multitasking reallocation: filing tasks are performed on a digital platform and become easier under WFH, whereas coordination with lawyers is synchronous and harder to monitor. WFH thus shifted effort toward filing tasks and away from coordination. Perceived impacts follow a gradient: case managers and supervisors, who benefit from bureaucratic efficiency, are positive about WFH, while lawyers, who depend on service coordination, are clearly negative. |
| Keywords: | WFH, public-sector productivity, multitasking, judiciary |
| JEL: | J22 J45 M54 D73 H83 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18795 |