To what extent are the low productivity gains in the euro zone compared with the United States offset by the rise in the employment rate?

Labour productivity has grown markedly faster in the United States than in the euro zone since 2016; productivity growth between the start of 2016 and the end of 2023 was 14.5% in the United States and 1% in the euro zone. Weak productivity growth in the euro zone can be offset by a rapid rise in the employment rate, as companies are forced to substitute labour for productivity. But if the rise in the employment rate mainly concerns unskilled workers, it also leads to a decline in productivity gains. In total, since the start of 2016, labour productivity has risen by 13.5 percentage points less in the euro zone than in the United States; the employment rate has risen by 1.6 pp more in the euro zone than in the United States, meaning that the greater rise in the employment rate in the euro zone than in the United States has offset only a very small part of the smaller rise in productivity in the euro zone than in the United States.