Trend labour productivity growth has been improving for several years, but it remains weak. To bolster falling private R&D introduce policies that avoid favouring incumbents over entrants, such as immediate R&D expenditure refunds and carry-forward of losses for tax deduction purposes. Reduce barriers to labour mobility and skills mismatch.
- Better evaluate the effectiveness of public R&D spending and strengthen the co-operation between enterprises and research institutions.
- Reduce grade repetition in secondary education, provide more school autonomy and better monitor education quality.
- Increase competition in the non-financial services sector.
- Reduce disincentives to work for older workers.
Source: OECD May 2017 Economic Outlook database.
Ferdy Adam and Véronique Sinner (2012) “An examination of Luxembourg’s relative labour productivity performance vis-à-vis the euro area since the crisis”, Economie et Statistiques Working papers du STATEC N° 60.
Umut Kilinç (2014), “Factor allocation and firm-level productivity dynamics in the manufacturing sector”, Economie et Statistiques Working papers du STATEC N° 71.
Productivity - enhancing institutions
Conseil de la Concurrence – a competition authority, reformed 2012, President and 3 Councillors.
Conseil Economique et Social – an advisory body, a tripartite permanent consultation body, founded 1966, reformed in 2014. 39 members, 18 representing each employers and employees, and 3 representing the government.
Competitiveness Observatory (Observatoire de la Compétitivité) –standing enquiry body, an independent unit within the Ministry of Economy; Chair and 4 members.
STATEC Research RED – publicly funded research unit (within the national statistical office) – 8 researchers