The impact of the COVID-19 pandemic on labour productivity in European Union

Abstract

The purpose of this article is to determine the impact of Covid-19 on aggregate labour productivity and labour productivity in different economic activity fields in European Union and to investigate the reasons of changes in labour productivity per employee in the macroeconomic level. In the article, firstly labour productivity per employee (GDP divided by the number of employed persons) in EU for the years 2013–2021 has been provided, then the results of the pandemic period have been compared with the results of the previous years. Both GDP and the number of employed persons have been decreased in 2020 compared to 2019. However, the decrease in GDP was higher than the decrease in number of employees which also means a drop in labour productivity per employee. Regarding the impact of the pandemic on labour productivity in various economic activity fields in EU, percentage changes of real labour productivity per employee in different industries in 2020 compared to 2019 show that there are substantial differences in changes which could mainly (but not only) explained by government restrictions causing business closures or working from home in some industries. For this reason, the relationship between real labour productivity per person and working from home in selected economic activity fields fitting best to the purpose and method of our analysis has been investigated and correlation coefficient has been calculated. The results confirm that working from home affected labour productivity in different economic activity fields during the pandemic.