Productivity review of the Netherlands

The Netherlands has one of the highest levels of labour productivity in the OECD, but growth has slowed over the past decade. The slowdown partly mirrors global trends but has been accentuated by weak investment and declining business dynamism. Against this background, this paper provides a cross-country comparative analysis of the role of firm entry, exit, growth and resource reallocation across firms, in shaping recent Dutch productivity performance. A set of policy simulations suggests that, even though the country performs well on a wide range of policy indicators, some reforms could boost business creation and job reallocation, thereby lifting productivity. The most promising measures include streamlining labour legislation, upgrading education and training, reducing the administrative burden on start-ups, refining the insolvency regime and further encouraging R&D and venture capital investment.