Back to The Productivity Puzzle

The productivity puzzle: A closer look at the United States

Back to The Productivity Puzzle

The productivity puzzle: A closer look at the United States

Despite increasing penetration of digital technology, US productivity growth has declined sharply since 2004. The question is, “Why?”

This discussion paper reveals the results of a microanalysis, which identify six characteristics of the productivity-growth slowdown: low value-added growth after the financial crisis; a shift in the composition of employment in the economy toward lower-productivity sectors; a lack of productivity-accelerating sectors after the financial crisis; weak capital-intensity growth; uneven rates of digitization across sectors, where the least digitized often are the largest sectors, with relatively low productivity; and diverging firm-level productivity, with slowing business dynamism.

Exhibit

sectors in US economy with accelerating productivity growth

In the media

The productivity puzzle
Article

The Wall Street Journal: The productivity puzzle

The productivity puzzle
Article

Quartz: US productivity growth is negative and economists aren’t sure why

Video

Productivity puzzle
Video

Policy implications of sustained low productivity growth

Jaana Remes was the discussant at The Peterson Institute for International Economics’ major research conference on the “Policy Implications of Sustained Low Productivity Growth” on November 9, 2017.

Connect with the McKinsey Global Institute