Labour, Productivity and Growth: an Introductory Essay

The purpose of this paper is to introduce the special issue on "Labour, Productivity and Growth". The paper discusses the articles in the special issue which investigate from different points of view the main theme – labour, productivity and growth – by employing a variety of econometric methods. These include: a) improvement of the evaluation of the impact of labour market flexibility on economic performance; b) analysis of the macroeconomic law of decreasing returns to labour; c) a new panel cointegration method; d) a re-interpretation of cointegration analysis to assess the impact of incomes policy. Institutional variables, in particular the system of industrial relations, are duly considered. The articles in the special issue highlight different causes of sluggish economic (productivity) growth in Europe, resorting not only to traditional macroeconomic variables, such as total factor productivity and labour market flexibility, but also to such factors as neo-corporatist industrial relations and management practices, which are generally neglected in the literature. The paper introduces a number of articles proposing innovations in the interpretation and application of a wide range of theoretical approaches and econometric methodologies. It also discusses several policy suggestions for fighting sluggish productivity growth, including investment in research and development, human capital, flexicurity, innovative industrial relations practices and high performance workplace practices considered able to affect also macroeconomic performance.