Institut für Wirtschaftsforschung Halle

RTD - Project in EU's 5th Framework Programme

EU Integration and the Prospects for Catch-Up Development in CEECs
The Determinants of the Productivity Gap

Stylised facts setting the agenda

Central East European countries exhibit much lower levels of economic development in comparison to the average EU-15 levels (GDP per capita: present table). Most regions in those states are hence eligible for EU's Structural and Cohesion Funds.

Since the new member states in Central East Europe have overcome their transformational recession, most have experienced growth rates of GDP above the EU-15 average (present diagramme). Hence, some process of real economy convergence could be observed in the past.

Productivities are measured here as value added per full-time equivalent employment. The productivity gaps between most new member countries vis-à-vis the average EU-15 level are sizeable yet have been swiftly narrowing in the past (present diagramme). Today, Slovenia exhibits the lowest gap, and Poland the largest.

From 1995 onwards, productivity growth rates in the new members had been higher than those for the EU-15 average (present diagramme). Over the whole period of 1993 to 2002, the highest growth rates can be observed for Estonia, the lowest for the Czech Republic.

Note: where productivity gaps are not used to represent income differentials, the use of PPP-corrected exchange rates is questionable. With -in general- undervalued exchange rates, the productivity gaps of accession states turn out much higher if measured in market exchange rates (present diagramme).

Unique micro-data sets generated - now free for all to use

Final report of the project

The final report of the project is out now.
It summarises the most important results generated during the three years of research in the project.
The final report is structured in seven chapters, and can be downloaded in following the link to Periodic reports.

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Homepage co-ordinator

	The Project
	EU Integration and the Prospects for Catch-Up Development in CEECs The Determinants of the Productivity Gap
•	Stylised facts setting the agenda
		Central East European countries exhibit much lower levels of economic development in comparison to the average EU-15 levels (GDP per capita: present table). Most regions in those states are hence eligible for EU's Structural and Cohesion Funds.
		Since the new member states in Central East Europe have overcome their transformational recession, most have experienced growth rates of GDP above the EU-15 average (present diagramme). Hence, some process of real economy convergence could be observed in the past.
		Productivities are measured here as value added per full-time equivalent employment. The productivity gaps between most new member countries vis-à-vis the average EU-15 level are sizeable yet have been swiftly narrowing in the past (present diagramme). Today, Slovenia exhibits the lowest gap, and Poland the largest.
		From 1995 onwards, productivity growth rates in the new members had been higher than those for the EU-15 average (present diagramme). Over the whole period of 1993 to 2002, the highest growth rates can be observed for Estonia, the lowest for the Czech Republic.
		Note: where productivity gaps are not used to represent income differentials, the use of PPP-corrected exchange rates is questionable. With -in general- undervalued exchange rates, the productivity gaps of accession states turn out much higher if measured in market exchange rates (present diagramme).

•	Unique micro-data sets generated - now free for all to use
	The data generated in the project had previously been exclusively used by the researchers involved in the field work. The databases are now open source, and researchers interested in our data are able to download the databases and are free to use it for their own purposes. Database download section Note: (i) please be so kind as to inform the coordinator about any analysis and publications, so that the consortium can keep track of the use of the data; and (ii) please make sure to include a note of the EU project contract for the data (Research presented here is based upon the “CEEC subsidiary database”, the generation of which was financially supported by the EU in the RTD project "EU Integration and the Prospects for Catch-Up Development in CEECs - The Determinants of the Productivity Gap" (contract no HPSE-CT-2001-00065) in any publications that use the data.

•	Final report of the project
	The final report of the project is out now. It summarises the most important results generated during the three years of research in the project. The final report is structured in seven chapters, and can be downloaded in following the link to Periodic reports.

	Email co-ordinator Homepage co-ordinator