Labour productivity and compensation of employees in Europe

The current international crisis has highlighted the need to improve productivity. This article examines labour productivity and compensation of employees in the main European economics over the past 15 years. The decomposition of labour productivity suggests that, during the most recent phase of expansion, capital stock per hour worked hides a widespread decline in Multifactor Productivity (MFP). There was also a significant deterioration in the equity of primary income distribution. The crisis seems to be correcting this trend, with some exceptions, but at the expense of rising unemployment rates.