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Labour productivity
Productivity growth can be measured by relating changes in output to changes in one or more inputs to production. The most common productivity measure is labour productivity, which links changes in output to changes in labor input. It is a key economic indicator and is closely associated with standards of living.
Definition
GDP estimates are based on the 1993 System of National Accounts. Estimates of the hours actually worked reflect regular work hours of full-time and part-time workers, paid and unpaid overtime, hours worked in additional jobs and time not worked because of public holidays, annual paid leave, time spent on illness and maternity leave, strikes and labour disputes, bad weather, economic conditions and other reasons.
Comparability
National statisticians and the OECD work to ensure that the data on hours actually worked are as comparable as possible, but they are based on a range of different sources of varying reliability. In most countries, the data are taken from household labour force surveys, while the rest use establishment surveys, administrative sources or a combination of sources. One problem is that for several EU countries, the estimates are made by the OECD using results from the Spring European Labor Force Survey. The results reflect a single observation in the year, and the survey data have to be supplemented by information from other sources for hours not worked due to public holidays and annual paid leave. Annual working hours reported for the remaining countries are provided by national statistical offices and are estimated using the best available sources. In general, the data are best used for comparisons of trends over time rather than for inter-country comparisons of level of productivity.
Although the GDP estimates are based on common definitions, the methods used by most countries to estimate value added in government services assume that labor productivity growth is zero. This means that countries with large government sectors or with government sectors that were growing during the period considered will, by assumption, have lower growth in GDP per hour worked than other countries.
Note that in the charts, EU15 excludes Austria and OECD excludes Austria, the Czech Republic, Hungary, Poland, the Slovak Republic and Turkey.
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Long-term trends Over the full period since 1992, Italy, Mexico and Spain have recorded the lowest growth rates in GDP per hour worked, while Ireland, Korea, and the four new OECD countries from Central Europe have been among the leaders. Australia, Canada, France, Germany, Japan, United Kingdom and the United States all had growth rates near to the OECD average. The graph focuses on performance in the latest five years; it clearly shows that the Czech Republic, the Slovak Republic, Hungary and Korea had the fastest labor productivity growth over the period 2000-2005. In Italy, Mexico and Portugal, GDP per hour worked has actually declined and average annual growth in Italy, Mexico, the Netherlands, Portugal, Spain and Switzerland has been below 1%. Among the larger OECD countries, the United Kingdom, France, Japan and the United States all had growth rates near to the OECD average, while in Canada and Germany, GDP per hour worked grew at lower rates. The estimates shown here are not adjusted for differences in the business cycle; cyclically adjusted estimates might show a somewhat different pattern. |
Sources
- OECD Productivity Database, www.oecd.org/statistics/productivity.
- OECD (2006), National Accounts of OECD Countries, OECD, Paris.
Further information
Analytical publications
- Ahmad, N., F. Lequiller, P. Marianna, D. Pilat, P. Schreyer and A. Wölfl (2003), Comparing Labour Productivity Growth in the OECD Area: The Role of Measurement, OECD Science, Technology and Industry Working Papers, No. 2003/14, OECD, Paris.
Methodological publications
- OECD (2001), "The Measurement of Productivity: What Do the Numbers Mean?”, Measuring Productivity – OECD Manual Measurement of Aggregate and Industry-level Productivity Growth, OECD, Paris, Chapter 3, pp. 29-61.
- OECD (2006), "Clocking In (and Out): Several Facets of Working Time”, OECD Employment Outlook, Chapter 1, see also Annex I.A1, OECD, Paris.
- Pilat, D. and P. Schreyer (2004), "The OECD Productivity Database – An Overview”, International Productivity Monitor, No. 8, Spring, CSLS, Ottawa, pp. 59-65.
- Schreyer, P. and D. Pilat (2001), "Measuring Productivity”, OECD Economic Studies, OECD, Paris.
- Van Ark, B. (2004), "The Measurement of Productivity: What Do the Numbers Mean?”, Fostering Productivity – Patterns, Determinants and Policy Implications, G. Gelauff, L. Klomp, S. Raes and T. Roelandt (eds.), Elsevier, Amsterdam; Boston, Chapter 3, pp. 29-61.
Websites
- OECD Compendium of Productivity Indicators, www.oecd.org/statistics/productivity.
| Texts | |
| • | Indicator web page |
| • | Indicator in PDF |
| Tables (xls) | |
| • | GDP per hour worked |
| Graphics | |
| • | GDP per hour worked |
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