1. KLEMS productivity accounts for the Polish economy Dariusz Kotlewski (University of Warsaw, Central Statistical Office of Poland) and Mirosław Błażej (Central Statistical Office of Poland) ♣ KLEMS

2. Structure of the presentation: Part I Basic methodology and specific issues Part II Solutions applied to Polish data problems Part III Results for Poland and some comparative observations ♣ KLEMS 2

3. Part I Basic methodology and specific issues ♣ KLEMS 3

4. ♣ The foundations ♣ ► Methodology fundamentally based on: Jorgenson, D. W. and Z. Griliches (1967), ‛The Explanation of Productivity Change’, Review of Economic Studies, 34, pp. 249-83. Jorgenson, D. W., F.M. Gollop and B.M. Fraumeni (1987), Productivity and US Economic Growth, Cambridge MA: Harvard University Press. Jorgenson D. W., M. Ho and K. Stiroh (2005), Information Technology and the American Growth Resurgence, MIT. ► And summarized in: Timmer M., van Moergastel T., Stuivenwold E., Ypma G. (Groningen Growth and Development Centre) and O’Mahony M., Kangasniemi M. (National Institute of Economic and Social Research) [March 2007], EU KLEMS Growth and Productivity Accounts, EU KLEMS Consortium. Poland KLEMS 4

5. ♣ Polish specific issues ♣ ► Capital ICT not extracted from total capital by industries ► Division into 18 types of labour (required for KLEMS) available only as representative sample surveys over firms employing more than 9 persons; total labour market divided only by industries ► The above-mentioned sample surveys available only every 2 years ► And available only in NACE 1 or NACE 2 not overlapping each other ► Short time series – no systematic regular data collection before 2004 (i.e. before the introduction of NACE 1) Poland KLEMS 5

6. Part II Solutions applied to Polish data problems ♣ KLEMS 6

7. ► Issue: Capital ICT not extracted from total capital by industries ♣ Solution:  Total ICT amounts distributed by industries proportionally to a chosen structure (ICT services) taken from SUT  Quick depreciation of ICT capital allowed to ignore its older vintages  Therefore, accumulated and depreciated investments over 2005-2010 had given total ICT stock in 2010 (American depreciation rates from KLEMS manuals)  For years before 2010 it was assumed that ICT stock is in the same proportion to total capital stock as in 2010  For the following years 2010 was treated as a base year  Works are carried out to shift this initial assessment to 2000-2005 Poland KLEMS 7

8. ► Issue: Division into 18 types of labour as required for KLEMS available only as representative sample surveys over firms employing more than 9 persons; total labour market divided only by industries ♣ Solution:  Total labour market structure by industries divided by equivalent total values (14/14) from the representative sample surveys (Z-12) used as a proportion to adjust upwards the full matrix structure of the Z-12 survey: Poland KLEMS 8 64 14/14 14 18 14 18 Eurostat transmission 34 18 Z-12

9.  Total labour market structure by industries divided by equivalent total values (14/14) from the representative sample surveys (Z-12) used as a proportion to adjust upwards the full matrix structure of the Z-12 survey: 64 Eurostat transmission tables aggregations → 14 NACE-1/NACE-2 labour market corresponding aggregations Poland KLEMS 9 64 14/14 14 18 14 18 Eurostat transmission 34 18 Z-12 Stage one

10.  Total labour market structure by industries divided (14/14) by equivalent total values from the representative sample surveys (Z-12) used as a proportion to adjust upwards the full matrix structure of the Z-12 survey: 64 Eurostat transmission tables aggregations → 14 NACE-1/NACE-2 labour market corresponding aggregations Poland KLEMS 10 64 14/14 14 18 14 18 Eurostat transmission 34 18 Z-12 Stage one Stage two

11.  Total labour market structure by industries divided (14/14) by equivalent total values from the representative sample surveys (Z-12) used as a proportion to adjust upwards the full matrix structure of the Z-12 survey: Poland KLEMS 11 64 14/14 14 18 14 18 Eurostat transmission 34 18 Z-12 The correct structure enlarged to EU KLEMS 34 industries thanks to Eurostat transmission 64 industries structure Stage two Stage three

12. ► Issue: The above mentioned sample surveys available only every 2 years ♣ Solution: linear interpolation ► Issue: And available only in NACE 1 or NACE 2 not overlapping each other ♣ Solution: CSO department dealing with the labour market delivered data for 2008 in both classifications ► Issue: Short time series – no systematic regular data collection before 2004 (i.e. before the introduction of NACE 1) ♣ Solution: It was decided not to extend KLEMS beyond 2005 in the past Poland KLEMS 12

13. ► Additional issue: some data only in ESA’95 or ESA 2010 ♣ Solution: Problem concerning the extraction of ICT capital; growths of stocks of capital by industries diverging only by less than few hundredth of percentage points in some cases; in most cases diverging only by less than few thousandth of percentage points or even less Ergo: the problem is negligible !! Poland KLEMS 13

14. Part III Results for Poland and some comparative observations ♣ KLEMS 14

15. Poland KLEMS 15 Main results: is secular stagnation approaching?

16. Poland KLEMS 16 Main results: spostrzeżenia : ♣ Two MFP growth pics seam to precede VA growth pics:

17. Poland KLEMS 17 Main results: spostrzeżenia : ♣ In the last years: negative MFP contribution despite a well growing economy:

18. Poland KLEMS 18 Main results: Little importance of ICT capital: USA, Sweden and Russia not extracting ICT capital !!

19. Poland KLEMS 19 Main results: … compared to ‟ICT countries”:

20. Poland KLEMS 20 Main results: : … and to ‟Non-ICT countries”:

21. Poland KLEMS 21 Main results: … and to Finland’s case (Nokia …?!):

22. Poland KLEMS 22 Main results: However, disparate results show perhaps a methodological problem:

23. Poland KLEMS 23 Main results: ♣ The so-called Polish ‟green island”:

24. Poland KLEMS 24 Main results: … compared to ‟MFP countries”:

25. Poland KLEMS 25 Main results: … and ‟Non-MFP countries”:

26. Poland KLEMS 26 Main results: ♣ High non-ICT capital contribution for Poland (after EU accession):

27. Poland KLEMS 27 Main results: … and its growing share in the value added growth:

28. Poland KLEMS 28 Main results: ♣ High hours worked contribution before the financial crisis:

29. Poland KLEMS 29 Main results: ♣ Highly changing wage contribution for Poland:

30. Poland KLEMS 30 Main results: … labour situation stabilizing in the last years:

31. Poland KLEMS 31 Hypotheses and observations for Poland: ♣ Poland is a Non-ICT country (with some misgivings on methodology as far as international comparativeness is considered) ♣ In Poland the technical progress is embodied sometimes in capital and other times in MFP, which suggest their exchangeability (observed also for e.g. the U.S.) ♣ The share of capital contribution in value added growth is continuously increasing in the long run (in the time frame of the analysis) ♣ Apart from capital, a great importance of the labour factor in the KLEMS accounting for Poland is observed ♣ A low and negative residual MFP growth in the last covered years is probably the result of ”demand evasion” through imported capital goods

32. Poland KLEMS 32 Analyses at industry level: ♣ Similarly to countries the industries can be also compared ♣ Moreover, it is possible to observe individual factors in the industries

33. ♣ E.g. decomposition of the industry contribution: Poland KLEMS 33

34. ♣ E.g. labour factor comportment by industries: Poland KLEMS 34

35. Poland KLEMS 35 Data sources: The CSO National Accounts Department supplied: ♣ Eurostat transmission tables: ♣ ESA95 Questionnaire 0301 – Output and income ♣ ESA2010 Questionnaire 0301 - Output ♣ ESA95 Questionnaire 2000 – Cross-classification of fixed assets by industry and by non-financial fixed asset ♣ ESA95 Questionnaire 0302 – Capital formation ♣ ESA2010 Questionnaire 0302 – Capital formation ♣ The SUT for years 2000-2011 ♣ Capital stocks tables for 2004-2011 according to ESA′95 ♣ Capital stocks tables for 2004-2013 according to ESA 2010

36. Poland KLEMS 36 Data sources: The CSO Demographic Surveys and Labour Market Department supplied: ♣ Eurostat transmission tables on the number of working persons and hours worked: ♣ ESA2_0303_A_M_Quest_NACE Rev2 ♣ ESA2_0303_A_H_Quest_NACE Rev2 ♣ ESA2010 Questionnaire 0303 - Employment ♣ Tables of the Z-12 survey for 2004, 2006, 2008, 2010, 2012 and 2014 containing subdivisions into different labour types

37. Thank you for your kind attention! ♣ KLEMS 37