Structural and productivity changes in the European countries during COVID-19 pandemic

Abstract

PURPOSE: This article aims to analyze structural and productivity changes for EU-27 in the period 2018-2020, just before and at the beginning of the Covid-19 pandemic.

DESIGN/METHODOLOGY/APPROACH: The study is based on Eurostat data for EU-27 countries from 2018-2020, containing total employment and gross value added by sectors. The primary method used is Shift-Share analysis.

FINDINGS: Results of the analysis confirm that two-fold changes in productivity were noted in both within and structural components. Only a few countries obtained a 2020 increase in overall productivity. The highest percentage decrease in productivity was noted by sector Arts, entertainment, and recreation, other service activities, household activities and extraterritorial organizations and bodies, wholesale and retail trade, transport, accommodation, and food service activities. In terms of employment changes, the highest decrease was noted in wholesale and retail business, transportation, housing, and food service activities and the highest increase in public administration, defense, education, human health, and social work activities, which was strictly related to anti-Covid actions introduced by governments.

PRACTICAL IMPLICATIONS: The article provides information about productivity and employment changes during a difficult period of economic performance caused by the Covid-19 pandemic, which is crucial for policymakers responsible for establishing assistance and support programs for the most disadvantaged sectors.

ORIGINALITY/VALUE: Analysis concerning the economic impact of the Covid-19 pandemic is relatively new, and the presented paper will provide new empirical findings, which will contribute to existing knowledge.