Employees who work on a production line Productivity is the key driver of economic growth, accounting for more than half the differences across countries in GDP per capita.
There are long-standing debates, however, on the effect of productivity growth on jobs. Higher productivity enables firms to expand production, employment, and wages – but it also reduces the number of workers needed to produce a given amount of output, possibly decreasing the demand for workers. New technologies further disrupt how productivity-enhancing investments translate into jobs.
Hence, the link between firm-level productivity growth and jobs is shaped by two opposite effects: > A […]
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