Rue de la Banque no. 43: What role did education, equipment age and technology play in 20th century productivity growth?

The 20th century was a period of exceptional growth, driven mainly by the increase in total factor productivity (TFP). Studying 17 OECD countries over the 1890-2013 period, this Rue de la Banque shows that the “one big wave” of productivity growth in the mid-20th century, as well as the ICT productivity wave, remain only partially explained when taking into account quality-adjusted factors such as education, equipment age and technology diffusion along with the stock of productive capital and hours worked. These results plead for a wider view on growth factors, encompassing changes in the production process, management techniques, financing practices, firm demography and factor allocation.