Introduction

Structural change has been comprehensive in Europe since 1945, with a shift from agriculture to industry and increasingly to services. It has also been an uneven process over time and space. In this chapter, trends and regional variations in output and productivity in each of the major sectors (agriculture, industry, and services) are presented and discussed in relation to the impact from primarily technological change and economic policy.

Agriculture

Growth and structural change

In the aftermath of the Second World War, agriculture still employed a large share of the workforce in most of Europe. Only the early developers – Great Britain, Belgium, and to a lesser extent the Netherlands and Germany – had by then already relatively low shares of labor employed in agriculture. During the half century that followed, employment in agriculture lost its importance across most of the Continent, due to the increase in factor productivity, which was crucial for catching-up and productivity convergence (Mellor 1995; Broadberry 2008). In 2000, agricultural employment was significant only in the most backward countries to the east, including Albania, Bulgaria, Romania, the Ukraine, and Turkey. The fall in the share of agricultural employment was in many places accompanied by a fall in the share of agriculture in total output. Yet these two changes were not closely correlated, because of differences in labor productivity across Europe.