Structural Change and Labour Productivity in Central Europe

The aim of the study was to determine the intensity and direction of structural change processes as well as their impact on labour productivity in Central Europe from 1995 to 2018. The shift-share analysis method was used to conduct an analysis of these interrelationships across nine sectors. In the majority of the analysed countries, a major driver of productivity was a shift of the workforce to sectors with a relatively high level of labour productivity. Structural change was the key driver of labour productivity in the Polish economy. Across the studied Central European countries, the highest level of labour productivity was recorded in hi-tech knowledge-intensive services, while hi-tech industries showed the fastest growth in terms of labour productivity. The sectors that drove the growth of labour productivity made a relatively low contribution to total employment. As a result, these sectors contributed much less to aggregate labour productivity growth than low knowledge-intensive services and low-technology industries.