Sectoral labour productivity growth: a growth accounting analysis of Dutch industries, 1973-1995

While labour productivity growth in the Dutch manufacturing industry gradually improved in the 1990's compared to the second half of the 1980's, it dropped back sharply in market services. As a result, overall labour productivity growth of the market sector is still slowing down. In an international perspective, the relative position of Dutch services has worsened over time.

The growth accounting tool can be used to decompose labour productivity growth into the contribution of factor inputs, such as physical and human capital, and total factor productivity growth. The sharp slowdown of productivity growth in Dutch market services has been accompanied by a drop in total factor productivity growth in the 1990's. While this suggests that the efficiency of the production process can be enhanced, further research is needed to improve understanding.