Labor Productivity Convergence among Eurozone Member Countries

Abstract

This paper analyzes the evolution of labor productivity among the Eurozone’s member countries between 1999 and 2019, using a dynamic panel estimate. The main findings indicate that, since the adoption of the single currency in 1999, both productivity per worker and productivity per hour followed different routes among Eurozone countries. Convergence among the founding countries stagnated after 2008, probably because of the Global Financial Crisis (GFC). But in the countries that joined the Eurozone several years after its creation, convergence did not slow down; indeed, towards the end of the period, the convergence of labor productivity among new entrants did not slow down. This paper focuses on measuring convergence in labor productivity and should be continued with a diagnosis of the likely causes of its stagnation. In this sense, it opens a line of research whose findings will contribute to the design of international integration policy between regions.