Impact of ageing and technological progress on labour productivity

This paper analyses determinants of labour productivity observed on a country level for fifteen selected OECD countries observed in the period from 2012 to 2019. It simultaneously studies the effect of ageing and technological progress on labour productivity and provides insight into characteristics that are shared between countries with high levels of labour productivity. Year-level data have been collected from OECD and UNCTAD, and two different methodologies (panel data and cluster analysis) have been used. Results on the impact of selected explanatory variables on labour productivity vary depending on the methodology used. The ageing of society undoubtedly has a positive impact, while the results of panel data analysis indicate a statistically insignificant effect of employment protection and investment in human capital. On the other hand, the cluster analysis results suggest that countries with higher levels of employment protection belong to a group of countries with higher levels of labour productivity. Similar results are obtained regarding investment in human capital, i.e. the level of public expenditure on education. The most significant difference in obtained results is related to technology, i.e. frontier technology readiness index, since the results of panel analysis suggest a negative, and K-means cluster a positive effect on labour productivity.