Global Productivity Trends, Drivers, and Policies by Alistair Dieppe (editor) published by World Bank Group (2020).
“The COVID-19 pandemic has plunged the global economy into its deepest recession since the Second World War. Per capita incomes are expected to decline in about 90 percent of countries in 2020, the largest fraction in recorded economic history, and many millions will be tipped into poverty (World Bank 2020a). The pandemic is also likely to leave lasting scars through multiple channels, including lower investment, erosion of human capital because of unemployment and loss of schooling, and a possible retreat from global trade and supply linkages. These effects may lower productivity and limit the ability of economies to generate growth of real incomes in the long-term.
The likely adverse impact of the pandemic on productivity would be a worrisome outcome, as growth of labor productivity is the main source of lasting per capita income growth, which in turn is the primary driver of poverty reduction. Most cross-country differences in per capita incomes have been attributed to differences in labor productivity.1 Whereas the one fourth of emerging market and developing economies (EMDEs) with the fastest labor productivity growth during 1981-2015 reduced their extreme poverty rates by an average of more than 1 percentage point per year, poverty rates rose in EMDEs with labor productivity growth in the lowest quartile (Figure 1).
The pandemic struck the global economy after a decade that witnessed a broad-based decline in productivity growth. The productivity slowdown, prior to the pandemic, affected around 70 percent of advanced economies and EMDEs. In advanced economies, the prolonged deceleration in productivity growth before the pandemic sparked an intense debate on how it would evolve in the future.2 Some innovations that had held the promise of considerable productivity gains, including digital technologies and automation of production processes, seemed to have been disappointing in this regard…”
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