Structural and productivity changes of Central and Eastern Europe

Abstract

The purpose of this paper is to analyse the structural and productivity changes of Central and Eastern European (CEE) countries. The research period covers the years following accession into the European Union, from 2004Union, from until 2018. . This study aims to answer the following question: What effects have resulted from the integration with the European Union in terms of the sphere of productivity? The analysis covers two main categories of labour productivity growth: pure labour productivity growth and structural labour productivity growth. Moreover, factors that may affect both pure and structural productivity changes are examined. The main research techniques are shift-share analysis and panel data methods. The analysis shows that all the CEE countries in the studied period improved in terms of both pure and structural productivity. The impact of pure labour productivity, however, was much smaller than that of structural labour productivity; this means that the main change in productivity level was more attributable to changes in employment between sectors than to the modernisation of technological processes. Productivity increased in all sectors, but the most significant growth occurred in service sectors, specifically in financial and insurance activities and real estate