Can we explain the trend in labour productivity in OECD countries?
Productivity gains have declined as a trend in OECD countries . Yet capital intensity (the ratio of capital to GDP or employment) has risen , and capital has been automated and modernised. With more abundant and modern per capita capital, we would expect productivity gains to be higher and not lower. So w hat accounts for this weakening of productivity gains ? Either a decline in labour force skills and a mismatch between skills and the economy’s needs ; Or growing corporate concentration and the emergence of dominant positions and monopolies, as monopolies can be highly capital-intensive but have no incentive to increase their productivity .