Productivity Growth and Structural Reform in Bulgaria : Restarting the Convergence Engine

Author/Editor: Cyril Pouvelle ; Pritha Mitra
Publication Date: May 01, 2012
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: Labor productivity levels in Bulgaria lag well behind that in the EU, weighing on the convergence process. Stronger productivity growth would allow Bulgaria to close the income gap with the EU average more quickly and to alleviate the structural problems in its labor market, reflected in its high long–term and youth unemployment. Our analysis of the drivers of labor productivity suggest that for Bulgaria closing the gap with EU standards in the areas of institutional and infrastructure quality, goods market efficiency, higher education, and innovation would permanently boost productivity growth by a total of 1 percentage point a year. This would be enough to close the income gap with the EU average by 2040, compared to the status quo where it would take an additional 10 years.
Series: Working Paper No. 12/131
Subject(s): Economic growth | Employment | European Union | Fiscal reforms | Income | Labor markets | Labor productivity | Production growth | Productivity | Unemployment | Wages

Author's Keyword(s): Economic Growth | Productivity | Cross-Country Convergence | Employment | Unemployment | Wages
Publication Date: May 01, 2012
ISBN/ISSN: 9781475503678/1018-5941 Format: Paper
Stock No: WPIEA2012131 Pages: 20
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