Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: The 26th issue of the International Productivity Monitor features articles on the follow topics: the role of weak demand in explaining slower productivity growth; the sectoral productivity performance of Ontario industries; the sensitivity of multifactor productivity growth in Canada and the United States to alternative methodologies and assumptions; the role of measurement issues in explaining the Canada-U.S. ICT investment gap; the potential contribution of firm-level data to productivity analysis; and policies to improve government productivity performance. Classification-JEL: Y2 Keywords: Journal: International Productivity Monitor Pages: 1-2 Volume: 26 Year: 2013 Month: Fall File-URL: http://www.csls.ca/ipm/26/IPM-26-editoroverview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:26:y:2013:0 Template-type: ReDIF-Article 1.0 Author-Name: Someshwar Rao Author-Email: someshwar6@gmail.com Author-Name: Jiang Li Title: Explaining Slower Productivity Growth: The Role of Weak Demand Growth Abstract: Using panel data on Canadian industris and OECD countries, this article examines empirically the role of growth in domestic and external demand in labou productivity growth. The findings suggest that most of the post-2000 slowdown in business sector labour productivity growth was the result of weak demand growth, which impacts productivity directly by reducing economies of scale and scope and by affecting key productivity drivers such as investment and R&D. With an expected slowdown in both domestic demand growth in Canada and external demand growth for Canadian exports, the medium- to long-term outlook for productivity growth, and hence for real income growth of Canadians, is expected to be weak. Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 3-19 Volume: 26 Year: 2013 Month: Fall File-URL: http://www.csls.ca/ipm/26/IPM-26-Rao-Li.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:26:y:2013:1 Template-type: ReDIF-Article 1.0 Author-Name: Peter S. Spiro Author-Email: spiropeter@gmail.com Title: A Sectoral Analysis of Ontario's Weak Productivity Growth Abstract: Since 2005, labour productivity growth in Ontario’s business sector has been zero, greatly under-performing the rest of Canada and being single-handedly responsible for most of what has been described as “Canada’s dismal productivity growth.” This article examines the issue through detailed sectoral data, and finds a wide range of variation underlying the average productivity growth rate. Some important sectors have maintained decent productivity growth. Other sectors, especially manufacturing, saw the level of productivity decline significantly. Empirical evidence suggests that weak aggregate demand – due to the high Canadian dollar, the U.S. recession, and global restricting- was the main cause of weak productivity. Weak demand led to lost economies of scale, particularly due to compositional shifts in the economy Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 20-35 Volume: 25 Year: 2013 Month: Fall File-URL: http://www.csls.ca/ipm/26/IPM-26-Spiro.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:26:y:2013:2 Template-type: ReDIF-Article 1.0 Author-Name: Jiang Li Author-Email: berylli@uvic.ca Author-Name: Larry Shute Author-Email: larry.shute@ic.gc.ca Author-Name: Jianmin Tang Author-Email: jianmin.tang@ic.gc.ca Title: Multifactor Productivity Growwth Estimation in Canada and the United States: Do Different Methodologies Matter? Abstract: National statistics offices in different countries, as well as individual researchers, make a range of different assumptions and use different approaches to estimating multifactor productivity (MFP) growth. As a result, MFP growth estimates can vary for methodological reasons across countries and for a particular country over a given time period. These methodological choices typically reflect a combination of data availability and the objectives of the study. In this article, we use “reasonably” comparable data for output, labour and capital in Canada and the United States to investigate the sensitivity of MPF growth estimates (by industry and for the business sector in the two countries) to three alternative methodological assumptions. We show that MFP growth estimates for both countries and the Canada-U.S. MFP growth gap are fairly robust to the alternative methodologies and assumptions considered. Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 36-62 Volume: 26 Year: 2013 Month: Fall File-URL: http://www.csls.ca/ipm/26/IPM-26-Li-Shute-Tang.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:26:y:2013:3 Template-type: ReDIF-Article 1.0 Author-Name: Vikram Rai Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Can the Canada-U.S. ICT Investment Gap be a Measurement Issue? Abstract: In 2011, business sector investment per worker in information and communications technology (ICT) in Canada was only 57.8 per cent of the U.S. level, indicating an ICT investment per worker gap of 42.2 percentage points. Numerous explanations have been advanced to explain this gap, one of which is the ICT investment data from Statistics Canada and the Bureau of Economic Analysis are not strictly comparable. We compare the methodology used to measure ICT investment in Canada and the United States and find that issues related to measurement account for approximately 4 percentage points (10 per cent) of the gap. The gap is concentrated in the software component of ICT investment (90 per cent) and in a small number of ICT-intensive industries, in particular information and cultural industries. The article concludes that the Canada- U.S. ICT investment per worker gap is largely the result of industry-specific factors that affect software investment. Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 63-85 Volume: 26 Year: 2013 Month: Fall File-URL: http://www.csls.ca/ipm/26/IPM-26-Rai-Sharpe.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:26:y:2013:4 Template-type: ReDIF-Article 1.0 Author-Name: Don Drummond Author-Email: drummond@queensu.ca Author-Name: Annette Ryan Author-Email: annette.ryan@hrsdc-rhdcc.gc.ca Author-Name: Michael R. Veall Author-Email: veall@mcmasters.ca Title: Improving Canada's Productivity Performance: The Potential Contribution of Firm-level Productivity Research Abstract: Canada’s recent productivity growth has been low by historical and international standards. Canadian and international studies have suggested this may be partly due to firm-level determinants. A chance to study this hypothesis has arisen from improved availability of firm-level data through the Canadian Centre for Data Development and Economic Research. We argue that this creates an important opportunity for researchers and describe one attempt to capitalize on it by developing a research network Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 86-93 Volume: 26 Year: 2013 Month: Fall File-URL: http://www.csls.ca/ipm/26/IPM-26-Drummond-Ryan-Veall.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:26:y:2013:5 Template-type: ReDIF-Article 1.0 Author-Name: Aled ab Iorwerth Author-Email: abiorwerth.aled@scienceadvice.ca Title: Mastering Leviathan: A Review Article on "Growing the Productivity of Government Services" Abstract: This review article evaluates the book “Growing the Productivity of Government Services” by Patrick Dunleavy and Leandro Carrera, which examines how government outputs can be measured and how the United Kingdom has strived to improve government productivity. The author finds the book valuable, as it shows how methodological advances reported in the Sir Tony Atkinson’s recommendations on reporting government outputs can be put into practice. Furthermore, document how government productivity can be improved in the United Kingdom provides valuable lessons for other countries. The potential of technology to improve government productivity is emphasized in the book, although the author suggests that a more basic role of reporting on government output will spur reform. Strong management skills will be important not only for effective implementation of IT but also for broader improvements in government productivity. Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 94-107 Volume: 26 Year: 2013 Month: Fall File-URL: http://www.csls.ca/ipm/26/IPM-26-Iorwerth.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:26:y:2013:6 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: The 27th issue of the International Productivity Monitor features a symposium on priorities and directions for future productivity research with five contributions from leading productivity researchers. In addition, the issue includes articles on the impact of the oil boom on Canada’s labour productivity performance, the contribution of intangible assets to productivity growth in Ontario, productivity trends in the forest products sector in Canada, and the influence of natural resource inputs on productivity. Classification-JEL: Y2 Keywords: Productivity, Oil Boom, Growth, Intangible Assets, Productivity Growth, Forest Products Sector, Canada, Natural Resources, Ontario Journal: International Productivity Monitor Pages: 1-3 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-eo.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:0 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Schreyer Author-Email: paul.schreyer@oecd.org Title: Priorities and Directions for Future Productivity Research: An OECD Perspective Abstract: This article puts forward three priority areas for future productivity research. It first identifies important data gaps related to non-produced, non-financial assets such as land and sub-soil assets as the exclusion of these assets can lead to biased multifactor productivity growth estimates. It then highlights the health and education sectors as a focus for future productivity research, given the challenges of capturing quality change in these sectors as well as the public provision of much of the output and absence of market prices. Finally, it points out that research is needed on the implications of globalization on productivity measurement, giving the example of intellectual property, which is produced in one country, but used in many. Classification-JEL: D24, F02, O34, O47 Keywords: Productivity, Productivity Research, Data, Assets, Globalization, Productivity Measurement, Intellectual Property, Multifactor Productivity Growth, Multifactor Productivity, OECD Journal: International Productivity Monitor Pages: 7-9 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-ps.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:1 Template-Type: ReDIF-Article 1.0 Author-Name: Dennis Fixler Author-Email: dennis.fixler@bea.gov Title: Priorities and Directions for Future Productivity Research: A BEA Perspective Abstract: This article identifies hard-to-measure services, land/natural resources, and factory-less goods manufacturing as three priority areas for productivity research. It highlights three hard-to-measure sectors for special attention: health, education, and financial services, given the difficulty of measuring prices and output in these sectors. It also argues that with the increased attention to the environment it has become increasing important to incorporate land and natural resources into the production function. Finally, it points out that the classification issues associated with factory-less goods producers have implications for the measurement of inputs and outputs at the sectoral level and hence for productivity estimates. Classification-JEL: O47, D24, N50, N70 Keywords: Land and Natural Resources, Land, Natural Resources, Manufacturing, Services, Productivity Growth, Productivity Measurement, Productivity Journal: International Productivity Monitor Pages: 10-13 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-df.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:2 Template-Type: ReDIF-Article 1.0 Author-Name: Dan Sichel Author-Email: dsichel@wellesley.edu Title: Priorities and Directions for Future Productivity Research: Health Care, Intangible Capital and High-tech Abstract: This article identifies health care, intangible capital, and the high-tech sector as priority areas for productivity research. In terms of health care, it highlights the importance of getting prices right and the key role that a satellite account for health care can play for productivity measurement. Regarding intangible capital, it stresses the importance of developing better price deflators for investment in tangible capital as well as better depreciation rates. Finally, it notes that because of the rapidly changing nature of the hightech sector measurement issues remain a priority. Classification-JEL: I11, D24, O47 Keywords: Health Care, Intangible Capital, High-tech Sector, Productivity, Productivity Research, Productivity Measurement Journal: International Productivity Monitor Pages: 14-16 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-ds.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:3 Template-Type: ReDIF-Article 1.0 Author-Name: Bart van Ark Author-Email: bart.vanark@conference-board.org Title: Priorities and Directions for Future Productivity Research: The Need for Historical Perspective Abstract: This article identifies three priorities for future productivity research: intangible assets, a better understanding of the impact of innovation on productivity, and a bridging of the gap between firm-level measures of productivity and industry-level and aggregate measures. It also makes the case for greater emphasis on historical measurement of productivity performance in the tradition of Angus Maddison. Classification-JEL: O47, D24, O30 Keywords: Productivity Research, Intangible Assets, Innovation, Productivity Measurement, Angus Maddison Journal: International Productivity Monitor Pages: 17-19 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-bva.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:4 Template-Type: ReDIF-Article 1.0 Author-Name: Barbara M. Fraumeni Author-Email: bfraumeni@usm.maine.edu Title: Frontiers and Opportunities in Productivity Research Abstract: This article highlights intangible capital, management practices, and human capital as areas for future productivity research. It also stresses the importance of developing reliable productivity estimates for emerging and developing countries, and of enhancing collaboration between national statistical offices and academic researchers. Classification-JEL: O47, D24, E24, G32 Keywords: Intangible Capital, Management Practices, Human Capital, Productivity Research, Productivity, Developing Countries Journal: International Productivity Monitor Pages: 20-21 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-bmf.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:5 Template-Type: ReDIF-Article 1.0 Author-Name: Tatiana Muntean Author-Email: tatiana.muntean@ontario.ca Title: Intangible Assets and their Contribution to Labour Productivity Growth in Ontario Abstract: Recent empirical studies confirm that the contribution of intangible capital investment to labour productivity growth is comparable to that of tangible capital investment for a wide range of countries, including the United States, the United Kingdom, Canada, Germany, and France. Following Corrado et al. (2005) and Baldwin et al. (2012), this article assesses business sector investment in intangible assets and analyses the contribution of intangible capital to business sector labour productivity growth at the provincial level in Canada, in particular in Ontario. The results of this growth accounting exercise demonstrate that intangible capital contributes significantly to labour productivity growth in Ontario. In 1998-2008 intangible capital contributed on average 26.2 per cent to labour productivity growth while tangible capital contributed 17.9 per cent and labour composition contributed 8.7 per cent. Innovative property contributed the most among all categories of intangible capital, followed by economic competencies and computerized information. Classification-JEL: O47, D24, J24, N92 Keywords: Intangible Assets, Intangible Capital, Labour Productivity, Productivity Growth, Ontario Journal: International Productivity Monitor Pages: 22-39 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-tm.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:6 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Bert Waslander Title: The Impact of the Oil Boom on Canada's Labour Productivity Performance, 2000-2012 Abstract: The objective of this article is to evaluate the impact of the oil and gas industry on labour productivity growth in Canada since 2000 through an exploration of the various channels, both direct and indirect, by which the oil and gas sector affects aggregate productivity. The article sheds light on the paradoxical lack of a direct negative contribution of the oil and gas sector to aggregate labour productivity growth despite the very large fall in productivity experienced by the sector. It highlights the divergent productivity growth paths for the oil and gas sectors in Alberta and Newfoundland and Labrador, which drove the aggregate productivity performance of these two provinces. The article also discusses how developments in the oil and gas industry, notably the increase in the price and production of petroleum, have affected productivity growth in other parts of the economy. Classification-JEL: J24, O47, O51, N72, D24, N92 Keywords: Canada, Oil Boom, Oil, Natural Gas, Energy Sector, Labour Productivity, Dutch Disease, Alberta, Newfoundland, Labrador, Oil and Gas Industry, Productivity Growth, Productivity Journal: International Productivity Monitor Pages: 40-63 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-csls.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:7 Template-Type: ReDIF-Article 1.0 Author-Name: Vernon Topp Author-Email: vtpp@pc.gov.au Author-Name: Tony Kulys Author-Email: tkulys@pc.gov.au Title: On Productivity: The Influence of Natural Resource Inputs Abstract: The production function underlying standard estimates of multifactor productivity (MFP)typically restricts the list of explicitly measured inputs to capital, labour and intermediate inputs (energy, materials and services). These inputs are measured in the national accounts, and in most industries are the most important or significant inputs to production. All other influences on output are captured by the MFP ‘residual.’ However in some industries – mining, agriculture, and utilities – output can also depend significantly on unmeasured inputs of natural resources. Rainfall in agriculture is an obvious example, but so too is the issue of mineral resource deposits in the mining sector, particularly where mining is a mature industry and the richest and most accessible deposits have already been developed. In this article we attribute a substantial part of recent large negative changes in MFP growth in the mining, agriculture and utilities industries in Australia to unmeasured natural resource input changes. As MFP growth estimates derived from the application of the usual production function are generally interpreted as measuring improvements in the ‘technology’ used to convert standard inputs into output, where there are significant changes in natural resource dependent industries this interpretation of MFP needs to be adjusted. Classification-JEL: O47, D24, O56, Q19, Q29, Q39, Q49 Keywords: Multifactor Productivity, MFP, Energy, Materials, Services, Intermediate Inputs, National Accounts, Unmeasured Inputs, Mining, Agriculture, Utilities, Technology Journal: International Productivity Monitor Pages: 64-78 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-vttk.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:8 Template-Type: ReDIF-Article 1.0 Author-Name: Ricardo de Avillez Author-Email: csls@csls.ca Title: An Analysis of Productivity Trends in the Canadian Forest Products Sector, 2000-2012 Abstract: The 2000-2012 period was a difficult time for the Canadian forest products sector. Yet despite an unfavourable environment the sector experienced an above-average productivity performance, driven in particular by the wood product manufacturing subsector. While the forestry and logging subsector has also benefited from strong productivity gains, the productivity performance of the paper manufacturing subsector has been far from impressive, especially in the post-2008 period. This article provides a detailed analysis of output, input and productivity trends in the Canadian forest products sector. It also looks at the key drivers of productivity in the sector, investigating potential barriers to productivity growth and discussing policies that could enable faster growth. Given the increasing role of countries with low-labour costs in several forest product markets, maintaining robust productivity growth is an imperative for the Canadian forest products sector if it wants to remain competitive internationally. In this sense, the article recommends renewed focus on human and physical capital investment, as well as on R&D spending. Classification-JEL: O13, O30, O51, J00, E23, Q20, D24, J08 Keywords: Productivity, Growth, Forestry, Canada, Research and Development, Capital Intensity, Human Capital, Physical Capital, Wood Product Manufacturing, Paper Manufacuturing, Forest Products Sector Journal: International Productivity Monitor Pages: 79-100 Volume: 27 Year: 2014 Month: Fall File-URL: http://www.csls.ca/ipm/27/27-rda.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:27:y:2014:9 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: The 28th issue of the International Productivity Monitor features articles on the following topis: the measurement of industry contributions to labour productivity growth; the benefits of closing the Aboriginal education gap; the impact of public policies on bargaining power and the pay/productivity linkage; the relationship between employment and productivity growth; and the contribution of ICT diffusion and investment to labour productivity growth. Classification-JEL: L60, L70, L80, L90, N32, N34, O51, O52, I21, I20, H52, H75, N92, C78, D24, E60, J28, J38, E24, J21, J24, O30, O33 Keywords: Productivity, Industry, Employment, Aboriginal, Education, Labour Productivity, Investment, ICT Diffusion Journal: International Productivity Monitor Pages: 1-2 Volume: 28 Year: 2015 Month: Spring File-URL: http://www.csls.ca/ipm/28/editorsoverview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:28:y:2015:0 Template-Type: ReDIF-Article 1.0 Author-Name: Marshall Reinsdorf Author-Email: mreinsdorf@imf.org Title: Measuring Industry Contributions to Labour Productivity Change: A New Formula in a Chained Fisher Index Framework Abstract: Canada and the United States use Fisher indexes in their input-output accounts. Existing methods for decomposing aggregate labour productivity growth into industry contributions in a Fisher index framework either leave some productivity growth unaccounted for or are poorly suited for answering relevant questions about the industry sources of productivity growth. This article derives formulas for analyzing industry contributions to productivity change that add up exactly to the aggregate change in productivity and that have useful economic interpretations. These formulas show that the manufacturing sector made a positive contribution to productivity growth in the Canada in 2000-2010 and in the United States in 1998-2012, whereas the widely used GEAD formula implies that manufacturing made a negative contribution. Methods that can be used to decompose chained Laspeyres measures of productivity growth are also developed. These methods would be applicable in countries other than Canada and the United States. Classification-JEL: L60, L70, L80, L90, N32, N34, O51, O52 Keywords: Canada, United States, Fisher Indexes, Fisher, Laspeyres, Paasche, Industries, Industry Contributions, Productivity Change, Additivity Journal: International Productivity Monitor Pages: 3-26 Volume: 28 Year: 2015 Month: Spring File-URL: http://www.csls.ca/ipm/28/reinsdorf.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:28:y:2015:1 Template-Type: ReDIF-Article 1.0 Author-Name: Matthew Calver Author-Email: matthew.calver@csls.ca Title: Closing the Aboriginal Education Gap in Canada: The Impact on Employment, GDP, and Labour Productivity Abstract: Despite improvements between 2001 and 2011, Canada’s Aboriginal population continues to underperform in the labour market. The Aboriginal educational attainment gap is often seen as the major source of these disparities. Using data from the 2011 National Household Survey, projections of Aboriginal population growth, and forecasts of aggregate economic conditions, we estimate the economic impact of closing the educational attainment gap by 2031. We find that the benefits of achieving such a feat could be very large, both for the Aboriginal population and for the country as a whole. Closing the education gap would raise Aboriginal employment by 90 thousand workers, GDP by $28.3 billion (2010 dollars) and Aboriginal employment income by $11,236 per worker in 2031. Labour productivity would increase by 0.03 percentage points per year over the 2011-2031 period. Assuming improvement occurs at a constant pace, we estimate that the cumulative gains to Canadian GDP would be as large as $261 billion (2010 dollars) over the 2011-2031 period. Classification-JEL: I21, I20, H52, H75, N92 Keywords: Aboriginal Education, Aboriginal, Canada, Metis, Inuit, First Nations, Reserve, Indian Status, Labour Productivity, Employment, Educational Attainment, Education Gap Journal: International Productivity Monitor Pages: 27-46 Volume: 28 Year: 2015 Month: Spring File-URL: http://www.csls.ca/ipm/28/calver.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:28:y:2015:2 Template-Type: ReDIF-Article 1.0 Author-Name: Mathieu Dufour Author-Email: mdufour@jjay.cuny.edu Author-Name: Ellen Russell Author-Email: russell@wlu.ca Title: Why Isn't Productivity More Popular? A Bargaining Power Approach to the Pay/Productivity Linkage in Canada Abstract: Canadian real labour income has increasingly lagged behind productivity growth. This article employs a bargaining power approach to wage determination to explore the hypothesis that some public polices intended to promote productivity growth may have contributed to the erosion of worker bargaining power, thereby reducing workers’ capacity to benefit from productivity growth. We present an econometric analysis of several policies that supports this hypothesis. Classification-JEL: C78, D24, E60, J28, J38 Keywords: Labour Income, Bargaining Power, Pay/Productivity Linkage, Wages, Income, Public Policy, Canada, Worker Bargaining Power Journal: International Productivity Monitor Pages: 47-62 Volume: 28 Year: 2015 Month: Spring File-URL: http://www.csls.ca/ipm/28/dufouretal.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:28:y:2015:3 Template-Type: ReDIF-Article 1.0 Author-Name: Jianmin Tang Author-Email: jianmin.tang@ic.gc.ca Title: Employment and Productivity: Exploring the Trade-off Abstract: The prospect of a trade-off between employment growth and productivity growth may create uncertainty among policy makers who strive to create jobs, and at the same time, seek to improve productivity. This article re-visits the issue. It shows that employment growth may be negatively correlated with productivity growth at the industry level. But this is not a trade-off. It is an outcome of market forces in reallocating production resources to rebalance changes in demand and supply conditions of different industries within an economy. At the aggregate level, employment growth may also be negatively correlated with labour productivity growth through its negative influence on capital intensity and labour quality. But, after controlling for those input factors, this article finds that employment growth does not negatively affect multifactor productivity growth. Classification-JEL: E24, J21, J24 Keywords: Employment, Productivity, Employment Growth, Trade-Off, Capital Intensity, Labour Quality, Multifactor Productivity Journal: International Productivity Monitor Pages: 63-80 Volume: 28 Year: 2015 Month: Spring File-URL: http://www.csls.ca/ipm/28/tang.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:28:y:2015:4 Template-Type: ReDIF-Article 1.0 Author-Name: Gilbert Cette Author-Email: gilbert.cette@banque-france.fr Author-Name: Christian Clerc Author-Name: Lea Bresson Title: Contribution of ICT Diffusion to Labour Productivity Growth: The United States, Canada, the Eurozone, and the United Kingdom, 1970-2013 Abstract: This study measures and compares the trends in ICT diffusion and the contribution of ICT to labour productivity growth in the United States, Canada, the Eurozone, and the United Kingdom from 1970 to 2013. There are three main results: i) after a long period of sustained growth, ICT diffusion, as measured by the share of ICT capital stock to GDP expressed in current prices, has stabilized since 2000 in all four areas; ii) this stabilization happened at different levels, significantly higher in the United States than elsewhere; and iii) in all four jurisdictions, the contribution of ICT to labour productivity growth rose significantly in 1994-2004 compared to 1974-1994. Since 2004, the contribution of ICT to labour productivity growth has fallen off considerably. It only remains positive as a result of the continued advances in ICT performance as proxied by the continued fall in ICT prices. Unfortunately, the pace of improvement also appears to be rapidly decreasing. Classification-JEL: O30, O33 Keywords: ICT, ICT Diffusion, Labour Productivity Growth, Technological Change, Canada, United States, Eurozone, United Kingdom Journal: International Productivity Monitor Pages: 81-88 Volume: 28 Year: 2015 Month: Spring File-URL: http://www.csls.ca/ipm/28/cetteetal.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:28:y:2015:5 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: The 29th issue of the International Productivity Monitor features six articles on the following topics: the role of productivity in long-term economic projections for the Canadian provinces and territories; productivity trends in the residential care sector in Canada; agricultural productivity in Australia, Canada and the United States; a mathematical reconciliation of gross output-based total factor productivity (TFP) growth with value added-based TFP growth; an empirical illustration with Australian industry data of the relationship between the two TFP measures; and a review article on the OECD report The Future of Productivity. Classification-JEL: D24, N52, N57, O13, H68, J11, N12, N32, N42, N92, I11, I12, N12, N32, N42, N92, C00, C69, D24, C00, C69, D24, N57, N67, N77 Keywords: Economic Projections, Canada, United States, Australia, Productivity, Residential Care, Total Factor Productivity Journal: International Productivity Monitor Pages: 1-2 Volume: 29 Year: 2015 Month: Fall File-URL: http://www.csls.ca/ipm/29/editorsoverview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:29:y:2015:0 Template-Type: ReDIF-Article 1.0 Author-Name: Don Drummond Author-Email: don.drummond@queensu.ca Author-Name: Evan Capeluck Author-Email: evancapeluck@gmail.com Title: The Role of Productivity in Long-Term Economic and Fiscal Projections for the Canadian Provinces and Territories, 2014-2038 Abstract: This article presents long-term projections for labour productivity and labour supply growth for the provinces and the territories for the 2014-2038 period, and discusses their implications for budgetary balance at the provincial/territorial level. We find that under our realistic assumptions, most provinces and territories will not be able to meet the test of balancing revenue growth with growth in public spending without either raising taxes or cutting program spending. Given the relative distaste for higher taxes and spending cuts, provincial/territorial governments in Canada must find ways to boost productivity and labour supply growth, and hence revenue growth, to maintain fiscal balance to 2038. Classification-JEL: H68, J11, N12, N32, N42, N92 Keywords: Projections, Labour Productivity, Labour Supply, Demographics, Canada, Fiscal Projections, Taxes Journal: International Productivity Monitor Pages: 3-17 Volume: 29 Year: 2015 Month: Fall File-URL: http://www.csls.ca/ipm/29/drummondandcapeluck.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:29:y:2015:1 Template-Type: ReDIF-Article 1.0 Author-Name: Wulong Gu Author-Email: wulong.gu@statcan.gc.c Author-Name: Jiang Li Title: Productivity in Residential Care Facilities in Canada, 1984-2009 Abstract: This article examines the productivity performance of the residential care sector in Canada. The output of that sector is currently measured by inputs in the current national accounts and therefore cannot be compared with inputs to provide a meaningful indicator of productivity for the sector. In contrast, the output measure in this article is a direct output measure that can be used to estimate the productivity performance of the sector. We find that labour productivity was virtually unchanged in the sector in Canada over the 1984- 2009 period, with a large variation in labour productivity growth across the provinces. The level of labour productivity in residential care facilities also differs significantly across the provinces, reflecting differences in the ownership structure (private vs. public) and the size of residential care facilities. Classification-JEL: I11, I12, N32, N42, N92 Keywords: Residential Care Facilities, Productivity, Canada, Provinces, Territories, Output, Hours Worked, Residential Care Sector, Residential Care, Labour Productivity Journal: International Productivity Monitor Pages: 18-37 Volume: 29 Year: 2015 Month: Fall File-URL: http://www.csls.ca/ipm/29/guandli.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:29:y:2015:2 Template-Type: ReDIF-Article 1.0 Author-Name: Yu Sheng Author-Email: yu.sheng@agriculture.gov.au Author-Name: Eldon Ball Author-Email: eball@ers.usda.gov Author-Name: Katerina Nossal Author-Email: katerina.nossal@gmail.com Title: Comparing Agricultural Total Factor Productivity between Australia, Canada, and the United States, 1961-2006 Abstract: This article provides a comparison of levels and growth of agricultural total factor productivity between Australia, Canada, and the United States for the 1961–2006 period. A production account for agriculture that is consistent across the three countries is constructed to estimate output, input and total factor productivity, and a dynamic panel regression is used to link the productivity estimates to potential determinants. We show that investment in public research and development and infrastructure plays an important role in explaining differences in productivity levels between countries. The findings provide useful insights into how public policy could be used to sustain agricultural productivity growth. Classification-JEL: D24, N52, N57, O13 Keywords: Agriculture, Canada, Australia, United States, Total Factor Productivity Journal: International Productivity Monitor Pages: 38-59 Volume: 29 Year: 2015 Month: Fall File-URL: http://www.csls.ca/ipm/29/shengballandnossal.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:29:y:2015:3 Template-Type: ReDIF-Article 1.0 Author-Name: Erwin Diewert Author-Email: erwin.diewert@ubc.ca Title: Reconciling Gross Output TFP Growth with Value Added TFP Growth Abstract: This article obtains relatively simple exact expressions that relate value added total factor productivity growth (TFP) in a value added framework to the corresponding measures of TFP growth in a gross output framework when Laspeyres or Paasche indexes are used to aggregate outputs and inputs. Basically, as the input base becomes smaller, the corresponding estimates of TFP growth become larger. A fairly simple approximate relationship between Fisher indexes of gross output TFP growth and the corresponding Fisher index of value added TFP growth is also derived. The methodology developed in this article has a number of applications. Classification-JEL: C00, C69, D24 Keywords: Value Added Total Factor Productivity, Total Factor Productivity, Laspeyres, Paasche, Fisher, Gross Output Total Factor Productivity Journal: International Productivity Monitor Pages: 60-67 Volume: 29 Year: 2015 Month: Fall File-URL: http://www.csls.ca/ipm/29/diewert.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:29:y:2015:4 Template-Type: ReDIF-Article 1.0 Author-Name: Matthew Calver Author-Email: matthew.calver@csls.ca Title: On the Relationship between Gross Output-based TFP Growth and Value Added-based TFP Growth: An Illustration Using Data from Australian Industries Abstract: Diewert (2015) develops simple expressions for the exact relationship between value added TFP growth and gross output TFP growth. These expressions suggest that the magnification factor relating the two TFP growth measures is approximately equal to the share of primary inputs in total costs. We apply these simple approximations to data on Australian industries, finding that they tend to provide very close approximations over short time periods, but are less reliable over longer time horizons. We find that magnification factors vary significantly across industries so that the results of comparative studies can be quite sensitive to the choice of output measure chosen to construct TFP. In particular, industries in which intermediate inputs account for a large share of total inputs exhibit much smaller TFP growth (in absolute value) compared to industries where intermediate inputs are relatively unimportant when gross output is used to construct TFP measures rather than value added. Classification-JEL: C00, C69, D24, N57, N67, N77 Keywords: Value Added Total Factor Productivity, Total Factor Productivity, Laspeyres, Paasche, Fisher, Gross Output Total Factor Productivity Journal: International Productivity Monitor Pages: 68-82 Volume: 29 Year: 2015 Month: Fall File-URL: http://www.csls.ca/ipm/29/calver.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:29:y:2015:5 Template-Type: ReDIF-Article 1.0 Author-Name: Don Drummond Author-Email: don.drummond@queensu.ca Title: Progress on the Mystery of Productivity: A Review Article on the OECD Report 'The Future of Productivity' Abstract: For decades the OECD has been a leader in the research of productivity and the development of policy ideas to strengthen it. Yet many countries, including Canada, that have implemented the OECD paradigm reasonably faithfully have not experienced strong productivity. Indeed, many OECD members, again including Canada, have experienced a decline in multi-factor productivity over the past 15 years. The record makes it fair to conclude that the OECD has not cracked the mysteries of productivity. So when the organization releases a new study under the bold title of The Future of Productivity certain questions are natural. Does the OECD have new and different perspectives to add? Will these perspectives lead to policy ideas that will succeed in raising productivity growth among member countries? The answer to the first question is a resounding yes. The OECD flags, quite appropriately, that the research needs to go beyond the so-called policy fundamentals and examine the behavior or firms, particularly why some firms so badly lag others in productivity. The OECD also now places much more emphasis on how human talent is allocated to jobs. This also seems promising. Whether such new directions of research will finally crack the mystery of productivity remains to be seen. But the OECD research program is heading in the right direction and warrants close attention. Classification-JEL: O47, D24, J24, N32 Keywords: Productivity, Canada, OECD Journal: International Productivity Monitor Pages: 83-88 Volume: 29 Year: 2015 Month: Fall File-URL: http://www.csls.ca/ipm/29/drummond.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:29:y:2015:6 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor's Overview Abstract: This 30th issue of the International Productivity Monitor contains eight articles on a range of productivity issues: the challenges of measuring productivity in the digital economy; productivity trends and policies in Mexico; a comparison of Australian and Canadian productivity growth; productivity growth in U.S. agriculture; productivity in Canadian freight railways; global productivity growth; productivity convergence; and productivity strategies. Classification-JEL: Y2 Keywords: Productivity, Rail, Mexico, Canada, United States, Agriculture, Digitalization, Digital Economy, Global Productivity, Productivity Convergence Journal: International Productivity Monitor Pages: 1-3 Volume: 30 Year: 2016 Month: Spring File-URL: http://www.csls.ca/ipm/30/editorsoverview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:30:y:2016:0 Template-Type: ReDIF-Article 1.0 Author-Name: Nadim Ahmad Author-Email: nadim.ahmad@oecd.org Author-Name: Paul Schreyer Author-Email: paul.schreyer@oecd.org Title: Are GDP and Productivity Up to the Challenges of the Digital Economy? Abstract: Recent years have seen a rapid emergence of disruptive technologies with new forms of intermediation, service provision and consumption, with digitalization being a common characteristic. These include new platforms that facilitate peer-to-peer transactions, such as AirBnB and Uber, new activities such as crowd sourcing, a growing category of the ‘occasional self-employed’ and prevalence of ‘free’ media services, funded by advertising and ‘Big data’. Against a backdrop of slowing rates of measured productivity growth, this has raised questions about the conceptual basis of GDP, and whether current compilation methods are adequate. This article frames the discussion under an umbrella of the Digitalized Economy, covering also statistical challenges where digitalization is a complicating feature such as the measurement of international transactions and knowledgebased assets. It delineates between conceptual and compilation issues and highlights areas where further investigations are merited. The overall conclusion is that, on balance, the accounting framework for GDP looks to be up to the challenges posed by digitalization. Many practical measurement issues remain, however, in particular concerning price changes and where digitalization meets internationalization. Classification-JEL: E01, E00 Keywords: Digital Economy, Big Data, Measurement, Crowd Sourcing, Peer-to-Peer Transactions Journal: International Productivity Monitor Pages: 4-27 Volume: 30 Year: 2016 Month: Spring File-URL: http://www.csls.ca/ipm/30/ahmadandschreyer.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:30:y:2016:1 Template-Type: ReDIF-Article 1.0 Author-Name: José Ernesto López Córdova Author-Name: Juan Rebolledo Márquez Padilla Author-Email: juan_rebolledo@hacienda.gob.mx. Title: Productivity in Mexico: Trends, Drivers and Institutional Framework Abstract: Over the past three decades, economic growth in Mexico has been lackluster, with declining multifactor productivity as the main culprit. Mexico’s growth malaise stems not only from existing barriers to the productivity of labour and capital, but also, to a large extent, from a misallocation of both inputs. This is epitomized by a large informal labour market and by a financially-underserved private sector. Factor misallocation has generated large productivity gaps between sectors and regions. In particular, a process of structural transformation that mobilizes resources toward high-productivity activities has unfolded slowly. To spur economic growth, the Mexican Government has placed productivity at the center of the policy agenda, not only by enacting a wide array of productivity-enhancing structural reforms, but also by establishing an institutional framework conducive to the design and implementation of public policies that address existing bottlenecks. Classification-JEL: N36, D24, E24, J24, O47, Keywords: Mexico, Productivity, Labour Productivity, Capital Productivity, Multifactor Productivity Journal: International Productivity Monitor Pages: 28-42 Volume: 30 Year: 2016 Month: Spring File-URL: http://www.csls.ca/ipm/30/cordovaandpadilla.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:30:y:2016:2 Template-Type: ReDIF-Article 1.0 Author-Name: Evan Capeluck Author-Email: evan.capeluck@csls.ca Title: A Comparison of Productivity Developments in Canada and Australia: Lessons for Canada Abstract: The objective of this report is to examine the impact of public policy on Australia’s productivity performance and to discuss possible lessons for Canada from this experience. To do this, the report conducts a comprehensive analysis of the productivity performance of both countries, with particular interest in determining which underlying factors can explain Australia’s superior productivity growth in recent years. In addition, the report discusses the literature on the effects of public policy on Australian productivity performance since the 1990s. Classification-JEL: D24, N17, N37, N47, N12, N32, N42 Keywords: Productivity, Capital, Labour, Multifactor Productivity, Productivity Growth, Human Capital, Innovation, Investment, Australia, Canada, Regulation Journal: International Productivity Monitor Pages: 43-63 Volume: 30 Year: 2016 Month: Spring File-URL: http://www.csls.ca/ipm/30/capeluck.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:30:y:2016:3 Template-Type: ReDIF-Article 1.0 Author-Name: V. Eldon Ball Author-Email: eball@ers.usda.gov Author-Name: Richard Nehring Author-Email: rnehring@ers.usda.gov Author-Name: Sun Ling Wang Author-Email: slwang@ers.usda.gov Title: Productivity Growth in U.S. Agriculture: 1948-2013 Abstract: It is widely reported that productivity growth is the main contributor to output growth in U.S. agriculture. This article provides estimates of output growth over the postwar period and decomposes that growth into the contributions of input growth and productivity growth. The analysis is based on recently revised production accounts for agriculture. Our findings are fully consistent with those reported in the literature. Productivity growth dominates input growth as a source of output growth in the sector. Classification-JEL: D24, E24, J24, N52, O13, Q19 Keywords: Productivity Growth, Agriculture, United States Journal: International Productivity Monitor Pages: 64-76 Volume: 30 Year: 2016 Month: Spring File-URL: http://www.csls.ca/ipm/30/ballnehringandwang.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:30:y:2016:4 Template-Type: ReDIF-Article 1.0 Author-Name: James Uguccioni Author-Email: james.uguccioni@csls.ca Title: Estimating Total Factor Productivity Growth: Canadian Freight Railways, 1986 to 2009 Abstract: Canadian railways are a vital part of the country’s transportation sector, moving goods and people across the country. We perform firm-level productivity analysis of Canadian freight railways for 1986 to 2009, focusing on the two railways which dominate the market: Canadian National (CN) and Canadian Pacific (CP). We obtain total factor productivity (TFP) estimates both by constructing productivity indices and by econometrically estimating cost functions. Driven in part by operational improvements, the strong TFP growth at both firms considerably outpaced aggregate TFP growth in Canada over the period of interest. This robust TFP growth, together with significant capital deepening, led to impressive labour productivity gains. We pay special attention to the productivity effects of the 1995 privatization of CN. While CN enjoyed much stronger productivity growth over the 1986-2009 period than CP, its performance was equally superior before and after the 1995 privatization. Classification-JEL: D22, D24, H32, J24, L92 Keywords: Rail, Transport, Productivity, Transportation, Canada, Total Factor Productivity, Multifactor Productivity Journal: International Productivity Monitor Pages: 77-97 Volume: 30 Year: 2016 Month: Spring File-URL: http://www.csls.ca/ipm/30/uguccioni.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:30:y:2016:5 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Productivity to the Rescue: Review Article on the McKinsey Global Institute Report Global Growth: Can Productivity Save the Day in an Aging World? Abstract: This review article provides a synthesis and critical assessment of the McKinsey Global Institute (MGI) report Global Growth: Can Productivity Save the Day in an Aging World? The key stylized fact that motivates the report is the expected fall-off in GDP growth for the G- 19 and Nigeria from an average annual rate of 3.6 per cent in the 1964-2014 period to a projected 2.1 per cent in the next fifty years (2014-2064). All of this slowdown is due to a fall-off in employment growth and none to slower labour productivity growth. MGI believes that there is great potential to accelerate productivity growth to offset the fall in employment growth and prevent any fall-off in GDP growth. Indeed, the report makes the case that it is feasible, although extremely challenging, to boost productivity growth in the G-19 and Nigeria to 4 per cent a year over the next decade, largely through catch-up to best practices. The report outlines public policies and private sector actions to achieve this target. Classification-JEL: D24, E24, J24 Keywords: Labour Productivity Growth, Aging, Productivity Journal: International Productivity Monitor Pages: 98-110 Volume: 30 Year: 2016 Month: Spring File-URL: http://www.csls.ca/ipm/30/sharpe.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:30:y:2016:6 Template-Type: ReDIF-Article 1.0 Author-Name: Jonathan Haskel Author-Email: j.haskel@imperial.ac.uk Title: Do Poor Countries Catch Up to Rich Countries? Review Article on Productivity Convergence: Theory and Evidence by Edward Wolff Abstract: This article provides a detailed review of Edward Wolff’s Productivity Convergence: Theory and Evidence. Wolff examines the long run productivity growth and convergence experience of a variety of countries from across the world. Wolff’s main contribution is the definition of two general classes of forces of convergence. He delineates “strong” forces of productivity convergence, such as the catch-up effect, capital formation, and education, from “weak” forces contributing to convergence like international trade, economic geography, and regulation. While some of the individual forces of convergence may switch categories as new research emerges, the categorization remains highly relevant. The focus on convergence suggests that non-frontier countries may not yet be in dire straits as a result of the purported recent productivity slowdown, as productivity growth may well still come from forces of convergence for years to come Classification-JEL: D24, E24, J24 Keywords: Productivity, Productivity Growth, Convergence, Productivity Convergence Journal: International Productivity Monitor Pages: 111-117 Volume: 30 Year: 2016 Month: Spring File-URL: http://www.csls.ca/ipm/30/haskel.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:30:y:2016:7 Template-Type: ReDIF-Article 1.0 Author-Name: Don Drummond Author-Email: don.drumond@queensu.ca Title: New and Promising Ideas in the Productivity Field: Review Article on Think Like an Enterprise: Why Nations Need Comprehensive Productivity Strategies by Robert Atkinson Abstract: The most interesting part of Robert Atkinson’s (President of the Information Technology and Innovation Foundation (ITIF)) manifesto on productivity is his recommended productivity strategy for strengthening productivity growth. Atkinson concludes that socalled framework policies are necessary but far from sufficient. The more active public policy role he calls for would include measures to lower the price of capital, moral suasion of firms to think more strategically, more direct government involvement in developing and disseminating new technologies and facilitating interactions across firms and sectors. Many will share Atkinson’s view that different approaches to enhancing productivity growth are in order given the modest productivity records of many countries of late. But it is troubling that Atkinson does not suggest more stringent tests for new policy interventions. They must be subject to benefit-cost analysis to determine whether there is a net social benefit. The experiences countries have had with elements of what Atkinson recommends must be studied to see if they have yielded productivity gains. Classification-JEL: D24, E24, J24 Keywords: Productivity, Productivity Growth, Productivity Strategies Journal: International Productivity Monitor Pages: 118-124 Volume: 30 Year: 2016 Month: Spring File-URL: http://www.csls.ca/ipm/30/drummond.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:30:y:2016:8 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor's Overview Abstract: The 31st issue of the International Productivity Monitor contains articles on the following topics:the productivity paradox in the New Digital Economy; the industry origins of Canada's weaker productivity growth; the factors behind the gap between productivity and median wage growth in Canada; a review of Robert J. Gordon's new book, The Rise and Fall of American Growth, with a response by the author; and a symposium on issues related to total factor productivity growth, including its sources, industry decompositions, and relationship to partial productivity measures. Classification-JEL: Y2 Keywords: Productivity, Canada, United States, Digitalization, Digital Economy, Global Productivity, Total Factor Productivity, Wages Journal: International Productivity Monitor Pages: 1-2 Volume: 31 Year: 2016 Month: Fall File-URL: http://www.csls.ca/ipm/31/editorsoverview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:31:y:2016:0 Template-Type: ReDIF-Article 1.0 Author-Name: Bart van Ark Author-Email: Bart.VanArk@conference-board.org Title: The Productivity Paradox of the New Digital Economy Abstract: Despite a rapid increase in business spending on capital and services in Information and Communication Technology (ICT), the New Digital Economy (mobile technology, the internet, and cloud) has not yet generated any visible improvement in productivity growth. This article reviews the latest evidence for the United States, the United Kingdom and Germany. We find rapidly declining ICT prices, a shift from ICT investment to ICT services, and a continued increase in knowledge based-assets supporting ICT. However, the New Digital Economy is still in its “installation phase” and productivity effects may occur only once the technology enters the “deployment phase”. Classification-JEL: D24, J24, L86 Keywords: Productivity, Productivity Growth, Productivity Strategies, Information and Communcations Technology, Digital Economy Journal: International Productivity Monitor Pages: 3-18 Volume: 31 Year: 2016 Month: Fall File-URL: http://www.csls.ca/ipm/31/vanark.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:31:y:2016:1 Template-Type: ReDIF-Article 1.0 Author-Name: John R. Baldwin Author-Name: Michael Willox Author-Email: michael.willox@canada.ca Title: The Industry Origins of Canada's Weaker Labour Productivity Performance and the Role of Structural Adjustment in the Post-2000 Period Abstract: This article examines how much of the slowdown in labour productivity growth observed in Canada's business sector after 2000 was due to weaker productivity growth within industries and how much was due to structural adjustment. The analysis makes use of a decomposition method that differs from many of the standard decomposition approaches commonly found in the literature and allows for the contributions of changes in the importance of individual industries to be calculated. The approach reveals that the post-2000 slowdown was attributable entirely to weaker productivity growth within industries and that structural adjustment had a slight mitigating effect on the slowdown. Lower productivity growth within three industries - manufacturing; finance, insurance and real estate; and mining, oil and gas - accounted for all of the slowdown in business sector labour productivity growth in the 2000s. Classification-JEL: D24, E24, J24, O51 Keywords: Productivity, Productivity Growth, Productivity Strategies, Labour Productivity, Canada Journal: International Productivity Monitor Pages: 19-36 Volume: 31 Year: 2016 Month: Fall File-URL: http://www.csls.ca/ipm/31/baldwin.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:31:y:2016:2 Template-Type: ReDIF-Article 1.0 Author-Name: James Uguccioni Author-Email: james.uguccioni@mail.utoronto.ca Title: Explaining the Gap between Productivity and Median Wage Growth in Canada, 1976-2014 Abstract: Canadian labour is more productive than ever before, but there is a pervasive sense among Canadians that the living standards of the 'middle class' have been stagnating. Indeed, between 1976 and 2014, median real hourly earnings grew by only 0.09 per cent per year, compared to labour productivity growth of 1.12 per cent per year. We decompose this 1.03 percentage-point growth gap into four components: rising earnings inequality; changes in employer contributions to social insurance programs; rising relative prices for consumer goods; and a decline in labour's share of aggregate income. Our main result is that rising earnings inequality accounts for half the 1.03 percentage-point gap, with a decline in labour's income share and a deterioration of labour's purchasing power accounting for the remaining half. Further analysis of the inequality component reveals that real wage growth in recent decades has been fastest at the top and at the bottom of the earnings distribution, with relative stagnation in the middle. Our findings are consistent with a 'hollowing out of the middle' story, rather than a 'super-rich pulling away from everyone else' story. Classification-JEL: J24, J31, O38, O47, O51 Keywords: Productivity, Wages, Income Distribution, Labour Productivity, Canada, Income, Inequality Journal: International Productivity Monitor Pages: 37-56 Volume: 31 Year: 2016 Month: Fall File-URL: http://www.csls.ca/ipm/31/uguccioni.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:31:y:2016:3 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel E. Sichel Author-Email: dsichel@wellesley.edu Title: Two Books for the Price of One: Review Article of The Rise and Fall of American Growth by Robert J. Gordon Abstract: Robert Gordon has written a remarkable book; actually two "books," one about the past and one about the future. The first "book" is an account of the dramatic changes in American living standards since 1870. Looking forward, the second "book" makes the case that the miracles that powered the economy upward in the century to 1970 cannot be repeated and that the rate of economic growth has stepped down. Moreover, given headwinds facing the economy, Gordon argues that the typical American family will see only sluggish improvements in living standards. The first "book" is truly extraordinary in its coverage and creativity - it is insightful, compelling, and highly entertaining (and would be for noneconomists as well as economists). The second "book" - not so much. It is more speculative and controversial. While Gordon's more pessimistic narrative has gained significant traction, I argue that there is plenty of room for optimism. Classification-JEL: D24, E24, J24, Y30, O47, I31 Keywords: Productivity, Productivity Growth, Economic Growth, Living Standards, Review Journal: International Productivity Monitor Pages: 57-62 Volume: 31 Year: 2016 Month: Fall File-URL: http://www.csls.ca/ipm/31/sichel.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:31:y:2016:4 Template-Type: ReDIF-Article 1.0 Author-Name: Robert J. Gordon Author-Email: rjg@northwestern.edu Title: Comments on Daniel Sichel's Review Article on The Rise and Fall of American Growth Abstract: Daniel Sichel's review focusses mainly on the future of innovation and technology. In contrast, my book is mainly about the past, and the reasons why the growth rate of total factor productivity in the years since 1970 has averaged only about one-third the rate registered between 1920 and 1970. My explanation is that a series of "Great Inventions" in the late 19th century, led by electricity and the internal combustion engine, utterly changed methods of production in the business economy and conditions of work on the job and at home. The digital revolution since 1960 has transformed business methods further and led to a temporary recovery of productivity growth between 1995 and 2004, but slow growth since 2004 suggests that the major impacts of the digital revolution are largely over, while technological transformations in the future will be evolutionary rather than revolutionary. Classification-JEL: D24, E24, J24, Y30, O47, I31 Keywords: Productivity, Productivity Growth, Economic Growth, Living Standards, Review Journal: International Productivity Monitor Pages: 63-67 Volume: 31 Year: 2016 Month: Fall File-URL: http://www.csls.ca/ipm/31/gordon.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:31:y:2016:5 Template-Type: ReDIF-Article 1.0 Author-Name: Nicholas Oulton Author-Email: n.oulton@lse.ac.uk Title: The Mystery of TFP Abstract: The objective of this article is to critically examine explanations of Total Factor Productivity (TFP) growth. TFP growth is analysed at the sectoral and aggregate level, using data for 10 industry groups covering the market sectors of 18 countries over the period 1970-2007 drawn from the EU KLEMS dataset. In all countries resources have been shifting away from industries with high TFP growth towards industries with low TFP growth. Nevertheless structural change has favoured TFP growth in most countries. Errors in measuring capital or in measuring the elasticity of output with respect to capital are unlikely to substantially reduce the role of TFP in explaining growth. The article concludes that the mystery of TFP is likely to remain as long as measurement error persists. Classification-JEL: D24, E24, J24, O47 Keywords: Productivity, Productivity Growth, Total Factor Productivity, Measurement Journal: International Productivity Monitor Pages: 68-87 Volume: 31 Year: 2016 Month: Fall File-URL: http://www.csls.ca/ipm/31/oulton.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:31:y:2016:6 Template-Type: ReDIF-Article 1.0 Author-Name: Matthew Calver Author-Email: matthewcalver449@hotmail.com Author-Name: Alexander Murray Author-Email: alexander.murray@csls.ca Title: Decomposing Multifactor Productivity Growth in Canada by Industry and Province, 1997-2014 Abstract: Between 1997 and 2014, multifactor productivity (MFP) in Canada's business sector industries grew at an annual rate of 0.02 per cent per year - essentially zero. In this article, we decompose aggregate MFP growth into contributions by industry and province. Two sets of results are presented: one based on the generalized exactly additive decomposition (GEAD) and one based on the CSLS decomposition. The two decomposition methods lead to very different conclusions. The GEAD suggests that the reallocation of inputs to the mining and oil and gas extraction industry in the oil-rich provinces were the primary drivers of MFP growth in Canada while the manufacturing sector, concentrated in Ontario and Quebec, dragged MFP growth down. The CSLS decomposition suggests precisely the opposite: mining and oil and gas was the main hindrance to Canada's MFP performance while manufacturing was the major driver of MFP growth. The disagreement between the two methods is primarily attributable to the fact that the large increase in commodity prices (especially oil prices) over the 1997-2014 period increases the mining and oil and gas industry's contribution to MFP growth according to the GEAD while the CSLS decomposition does not treat such relative price effects as contributors to productivity growth. Classification-JEL: D24, O51 Keywords: Productivity, Total Factor Productivity, Multifactor Productivity, Canada Journal: International Productivity Monitor Pages: 88-112 Volume: 31 Year: 2016 Month: Fall File-URL: http://www.csls.ca/ipm/31/calver.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:31:y:2016:7 Template-Type: ReDIF-Article 1.0 Author-Name: Alexander Murray Author-Email: alexander.murray@csls.ca Title: Partial versus Total Factor Productivity Measures: An Assessment of their Strengths and Weaknesses Abstract: A partial productivity measure relates output to a single input. Total factor productivity (or TFP) relates an index of output to a composite index of all inputs. This article reviews the strengths and weaknesses of each type of productivity measure from theoretical and methodological perspectives. Different productivity measures may be useful for different analytical purposes, and no single measure provides a complete picture of an industry's productivity performance. We argue for a balanced, context-appropriate approach to productivity analysis that incorporates both productivity measures. Classification-JEL: D24, J24, O47, Q3, O51 Keywords: Productivity, Total Factor Productivity, Multifactor Productivity, Labour Productivity, Natural Resources, Measurement, Canada, Agriculture Journal: International Productivity Monitor Pages: 113-126 Volume: 31 Year: 2016 Month: Fall File-URL: http://www.csls.ca/ipm/31/murray.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:31:y:2016:8 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Giuseppe Nicoletti Title: Editors' Overview Abstract: The 32nd issue of the International Productivity Monitor is a special issue produced in collaboration with the OECD. All articles published in this issue were selected from papers presented at the First Annual Conference of the OECD Global Forum on Productivity held in Lisbon, Portugal, July 7-8, 2016. The Forum was established by a large group of OECD member countries in 2015 to provide a platform for the mutual exchange of information and international cooperation between public bodies with a responsibility for promoting productivity-enhancing policies. The primary purpose of the Forum is to shed light on the structural and policy drivers of productivity, especially in the context of the generalized slowdown in productivity growth affecting OECD countries. It helps generate synergies in policy-oriented research; share data, results and insights; and facilitate the diffusion of best policy practices leveraging on both cross-country analysis and country-specific experiences. To this end, the Forum organizes conferences and workshops connecting policy-makers, academics and other stakeholders and proposes and coordinates research programs in areas related to productivity, notably by encouraging collaboration with national experts, to extend and support work done at the OECD Classification-JEL: Y2 Keywords: Productivity, Canada, United States, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, academics Journal: International Productivity Monitor Pages: 1-5 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/IPM32-Editor's%20Overview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:0 Template-Type: ReDIF-Article 1.0 Author-Name: Antonin Bergeaud Author-Name: Gilbert Cette Author-Email: gilbert.cette@banque-france.fr Author-Name: Remy Lecat Title: Total Factor Productivity in Advanced Countries: A Longterm Perspective Abstract: Changes in GDP during the 20th century have been mainly driven by total factor productivity (TFP). This article synthesizes results from our research based on the long period (1890-2015) productivity database we have constructed. In particular, we aim to refine our TFP measure by including the contribution of the improved quality of factor inputs and technology diffusion to TFP growth in four developed areas or countries: the United States, the euro area, the United Kingdom, and Japan. Two types of factor quality are considered: the average level of education and the average age of equipment. Two technological shocks corresponding to two general purpose technologies are investigated: electricity and information and communication technologies (ICT). However, even after these adjustments, long-term patterns of TFP growth do not change, with two major waves appearing over the past century and much of TFP growth remaining unaccounted for by quality-adjusted factors of production and technology diffusion. Our estimates show that the productivity impact of the recent ICT wave remains much smaller than that from the electricity wave, and that the post-1973 and the most recent slowdowns in TFP growth are confirmed. Classification-JEL: O47, D24, O51, O52, N7, D83 Keywords: Productivity, Canada, United States, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, GDP, Electricity, Communication Journal: International Productivity Monitor Pages: 6-24 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/Bergeaud_Cette_Lecat%20Version%202.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:1 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: James Uguccioni Title: Decomposing the Productivity Wage Nexus in Selected OECD Countries, 1986-2013 Abstract: Standard economic theory predicts that in the long run, productivity growth ought to drive aggregate real wage growth. We consider this prediction in the case of 11 OECD countries, and find that eight of the 11 experienced slower median real wage growth than labour productivity growth over the 1986-2013 period. We decompose the gap between labour productivity growth and median real wage growth into four components: wage inequality, changes in the importance of employer contributions to social insurance programs, differences between the prices of output and consumption, and changes to labour's share of income. The decompositions ultimately show that there is no common cause for the productivity-wage gap, though most countries did see wage inequality grow and labour's share of income fall to some degree over our period of study. Classification-JEL: O47, D24, N7, D83, J31, E24 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, academics, labour productivity, producitivity-wage gap Journal: International Productivity Monitor Pages: 25-43 Volume: 32 Year: 2017 Month: Spring File-URL:http://www.csls.ca/ipm/32/Uguccioni_Sharpe.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:2 Template-Type: ReDIF-Article 1.0 Author-Name: Cyrille Schwellnus Author-Email: cyrille.schwellnus@oecd.org Author-Name: Andreas Kappeler Author-Email: andreas.kappeler@oecd.org Author-Name: Pierre-Alain Pionnier Author-Email: pierre-alain.pionnier@oecd.org Title: The Decoupling of Median Wages from Productivity in OECD Countries Abstract: Over the past two decades, aggregate labour productivity growth in most OECD countries has decoupled from real median compensation growth, implying that increasing productivity is no longer sufficient to raise real wages for the typical worker. This article provides a quantitative description of decoupling in OECD countries over the past two decades, with the results suggesting that it is explained by declines in both labour shares and the ratio of median to average wages (a partial measure of wage inequality). Labour shares have declined in about two thirds of the OECD countries covered by the analysis. However, the contribution of labour shares to decoupling is smaller if sectors are excluded for which labour shares are driven by changes in commodity and asset prices (primary and housing sectors) or by imputation choices (non-market sectors). The ratio of median to average wages has declined in all but two of the OECD countries covered by the analysis and appears to reflect disproportionate wage growth at the very top of the wage distribution rather than stagnating median wages. The causes of these developments will be analysed in follow-up research. Classification-JEL: O47, D24, E24, J31 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, academics, Wage inequality, Median Wages Journal: International Productivity Monitor Pages: 44-60 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/Schwellnus_Kappeler_Pionnier.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:3 Template-Type: ReDIF-Article 1.0 Author-Name: Chiara Criscuolo Author-Email: Chiara.CRISCUOLO@oecd.org Author-Name: Jonathan Timmis Author-Email: Jonathan.TIMMIS@oecd.org Title: The Relationship Between Global Value Chains and Productivity Abstract: We review the evidence linking Global Value Chains (GVCs) and productivity. GVCs are a key feature of the world economy, with production increasingly fragmented across borders. However research has uncovered that GVCs are not primarily global in nature, but focused around regional clusters of production, and services and multinationals (MNEs) play a key role in these networks. A broad literature using both industry and firm-level data has uncovered that participating in GVCs can stimulate productivity growth through a myriad of channels. These include the potential for firm specialisation in core tasks, access to imported inputs, knowledge spillovers from foreign firms and pro-competitive effects of foreign competition. However, there are many potential obstacles to seizing the opportunities for growth. The changing organisation of production across firms and countries emphasises the importance of some well-established policy levers (such as trade policy) as well as some of those previously under-explored (such as domestic service market competition). Embeddedness within GVCs may also expose firms to new sources of risk and affect resilience of economies, as a shock to one part of the supply chain can propagate throughout production networks. Classification-JEL: O47, D24, E24, J31, D83, L11 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, academics, Global Value Chains, Knowledge Spillovers, Production Journal: International Productivity Monitor Pages: 61-83 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/Criscuolo_Timmis.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:4 Template-Type: ReDIF-Article 1.0 Author-Name: Emmanuel Dhyne Author-Email: emmanuel.dhyne@nbb.be Author-Name: Cedric Duprez Author-Email: cedric.duprez@nbb.be Title: It’s a Small, Small World... A Guided Tour of the Belgian Production Network Abstract: This article presents stylized facts about the participation of Belgian firms in global and local value chains, using transaction data at the firm level to depict the Belgian production network and its integration in the world economy. These data allow the identification of the various channels through which a Belgian firm has access to the world market, either to source its inputs or to sell its output. We also discuss how the level of efficiency of individual firms is related to their position in the local and global value chains. Classification-JEL: O47, D24, D4, G14 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, academics, Global Value Chains, Belgian Production Network, World Economy, Efficiency Journal: International Productivity Monitor Pages: 84-96 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/Dhyne_Duprez.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:5 Template-Type: ReDIF-Article 1.0 Author-Name: Giuseppe Berlingieri, Author-Email: giuseppe.berlingieri@oecd.org Author-Name: Patrick Blanchenay Author-Email: patrick.blanchenay@utoronto.ca Author-Name: Sara Calligaris Author-Email: sara.calligaris@oecd.org Author-Name: Chiara Criscuolo Author-Email: chiara.criscuolo@oecd.org Title: Firm-level Productivity Differences: Insights from the OECD’s MultiProd Project Abstract: Productivity plays a central role in shaping the welfare of societies and the competitiveness of countries. Productivity differences, for instance, explain a large share of the differences in income per capita across countries. This paper investigates the role of productivity heterogeneity across 18 countries over the period 2001-2012. In particular, it analyses the evidence that emerges from the distributed micro-data approach carried out in the OECD MultiProd project. The main outcome of the project is a unique dataset of harmonised crosscountry moments that are representative for the population of firms and comparable across countries even at a detailed industry level. We look at the 90-10 percentile ratio of LP and MFP and show that: i) productivity dispersion is high in both manufacturing and nonfinancial market services; ii) it has increased over time, especially in services; iii) a substantial part of this dispersion comes from differences among firms within the same sector of activity in each country; iv) this within sector dispersion remains the most important component of the overall dispersion for the entire period. Classification-JEL: O47, D24, D4, G14, O5 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, academics, efficiency, MultiProd, Journal: International Productivity Monitor Pages: 97-115 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/Berlingieri_Blanchenay_Calligaris_Criscuolo%20Version%202.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:6 Template-Type: ReDIF-Article 1.0 Author-Name: Andrea Linarello Author-Email: andrea.linarello@bancaditalia.it Author-Name: Andrea Petrella Author-Email: andrea.linarello@bancaditalia.it Title: Productivity and Reallocation: Evidence from the Universe of Italian Firms Abstract: This article investigates the contribution of allocative efficiency to aggregate labour productivity growth in Italy between 2005 and 2013. Exploiting a unique dataset that covers the universe of firms, we find that allocative efficiency increased during the period of observation. We show that the dynamics of aggregate labour productivity benefited from the reallocation of resources among continuing firms and from the net effect of business demography. Among industries, we find that reallocation has been stronger in industries that are more exposed to import competition from developing countries. Moreover, we document that the observed adjustments have not evenly affected all firms across the productivity distribution: selection has become tougher for firms belonging to the lower tail, forcing the exit of the least productive firms and favoring the reallocation of the workforce to the best performing ones. Classification-JEL: O47, D24, D4, G14, O52, H32, O1 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, aggregate labour productivity, firms competition, resource allocation Journal: International Productivity Monitor Pages: 116-136 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/Linarello_Petrella.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:7 Template-Type: ReDIF-Article 1.0 Author-Name: Ricardo Pineheiro Alves Author-Email: ricardo.alves@gee.min-economia.pt Title: Portugal: A Paradox in Productivity Abstract: Portugal has a lower level of productivity than advanced economies but, paradoxically, the recent improvement in several of its determinants did not lead to convergence in productivity levels. The objective of this paper is to better understand the larger slowdown in productivity growth in Portugal than the one occurring in those countries by considering its main determinants. It presents a set of different reasons for the divergence with developed economies since the mid-1990s that are associated with an increasing misallocation of capital, labour and skills both at a sectoral and firm level. Moreover, it outlines some policy proposals to enhance aggregate productivity growth in the Portuguese economy within a framework of growing integration in global markets. Classification-JEL: O47, D24, O52, E22, F6 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, Portugal, misallocation of capital, economic divergence Journal: International Productivity Monitor Pages: 137-160 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/Alves%20Version%202.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:8 Template-Type: ReDIF-Article 1.0 Author-Name: Rudiger Ahrend Author-Email: Rudiger.AHREND@oecd.org Author-Name: Alexander Lembcke Author-Email: Alexander.LEMBCKE@oecd.org Author-Name: Abel Schumann Author-Email: Abel.SCHUMANN@oecd.org Title: The Role of Urban Agglomerations for Economic and Productivity Growth Abstract: This article discusses how urban agglomerations – cities – affect economic productivity. It uses an internationally harmonized definition of cities that aims to capture the true extent of an urban agglomeration and is not limited by administrative city boundaries. It shows that labour productivity increases with city size. Among OECD metropolitan areas, agglomerations with more than 500,000 inhabitants, a 1 per cent population increase is associated with a 0.12 per cent increase in average labour productivity. Partly, this is explained by “sorting” as more productive workers tend to live in bigger cities. But bigger cities provide additional “agglomeration economies” to those working in them. Comparable workers are 0.02-0.05 per cent more productive in cities with a 1 per cent larger population. These differences compound to significant differentials, e.g. a similar worker in Madrid (6 million inhabitants) is, on average, nearly 15 per cent more productive than a worker in Toledo (120,000 inhabitants). Furthermore, the paper also shows that cities affect economic performance beyond their boundaries. Since 1995, per capita GDP growth in regions within 90 minutes driving of a large urban agglomeration has been approximately 0.4 percentage points higher than in those with no large urban agglomeration within 300 minutes of driving. Classification-JEL: O47, D24, O18, P42 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, academics, urban, population Journal: International Productivity Monitor Pages: 161-179 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/Ahrend_Lembcke_Shumann.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:9 Template-Type: ReDIF-Article 1.0 Author-Name: Edwin Lau Author-Email: Edwin.LAU@oecd.org Author-Name: Zsuzsanna Lonti Author-Email: Zsuzsanna.LONTI@oecd.org Author-Name: Rebecca Schultz Author-Email: Rebecca.SCHULTZ@oecd.org Title: Challenges in the Measurement of Public Sector Productivity in OECD 180 Countries Abstract: Productivity is one of the main engines of economic growth. While most existing work on productivity has focused on the private sector, there is great value in better understanding productivity in the public sector, given government's important role in the provision of goods and services and its substantial contribution to overall GDP. However, the measurement of public sector productivity as a first step towards better understanding its dynamics is fraught with challenges, as the public sector differs substantially from the private sector in some of its key characteristics. This article examines current country practices and challenges to measure public sector productivity and identifies five areas to further enhance measurement efforts: (i) improvements to input measurement and cost accounting, (ii) standardization and comparability of measures, (iii) output measurement beyond the education and health sectors, (iv) a typology of activities at the micro level, and (v) intra-governmental co-ordination on productivity measurement. The article also calls for further research on the policy drivers for public sector productivity to delve deeper into how governance frameworks can be mobilized to achieve greater public sector productivity in support of effective public governance and ultimately the well-being of citizens. Classification-JEL: O47, D24, H4, I31, H77, H83, J31 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, GDP, Goods and Services, government provisions, measurment, cost accounting, intra-government co-ordination Journal: International Productivity Monitor Pages: 180-195 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/lau.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:10 Template-Type: ReDIF-Article 1.0 Author-Name: Sean Dougherty Author-Email: sean.dougherty@oecd.org Author-Name: Andrea Renda Author-Email: andrea.renda@ceps.eu Title: Pro-Productivity Institutions: Learning from National Experience Abstract: This article analyses and compares ten institutions that have a mandate to promote productivity-enhancing reforms. The selected bodies include government advisory councils, standing inquiry bodies, and ad hoc task forces. We find that well-designed pro-productivity institutions can generally improve the quality of the policy process and political debate, and can make a significant contribution to evidence-based policy-making. Our findings also support the view that concentrating knowledge and research on productivity in one independent, highly skilled and reputed body can help create the momentum and the knowledge that are required to promote long-term productivity growth. Institutions located outside government have more leeway in promoting reforms that challenge vested interests and produce results that go beyond the electoral cycle. Smart government bodies can allow experimental policy-making and a more adaptive, evidence-based policy process. To be successful, pro-productivity institutions require sufficient resources, skills, transparency and procedural accountability to fulfil their tasks; a sufficiently broad mission, oriented towards long-term well-being and with both supply-side and demand-side considerations; policy evaluation functions; and the ability to reach out to the general public in a variety of ways Classification-JEL: O47, D24, D83, G18, E02 Keywords: Productivity, OECD, Policies, Global Productivity, Total Factor Productivity, Wages, academics, institutions, pro-productivity, government policy, capital, knowledge Journal: International Productivity Monitor Pages: 196-217 Volume: 32 Year: 2017 Month: Spring File-URL: http://www.csls.ca/ipm/32/Dougherty_Renda%20Version%202.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:32:y:2017:11 Template-Type: ReDIF-Article 1.0 Author-Name: Dale W. Jorgenson Author-Email: djorgens@fas.harvard.edu Title: World KLEMS: Productivity and Economic Growth in the World Economy: An Introduction Abstract: This issue of the International Productivity Monitor contains papers presented at the Fourth World KLEMS Conference, held at the BBVA Foundation, Madrid, Spain, on May 23-24, 2016. This is the latest in a series of international conferences devoted to research on productivity and growth in the world economy. World KLEMS is based on outputs and inputs of capital (K), labour (L), energy (E), materials (M), and services (S) for individual industries. Productivity of each industry is the ratio of output to all inputs. Classification-JEL: Y2, D24 Keywords: Productivity, Total Factor Productivity, Productivity Growth, measurement. Journal: International Productivity Monitor Pages: 1-7 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/Jorgenson.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:0 Template-Type: ReDIF-Article 1.0 Author-Name: Bart van Ark Author-Email: bart.vanark@conference-board.org Author-Name: Kirsten Jäger Title: Recent Trends in Europe's Output and Productivity Growth Performance at the Sector Level, 2002-2015 Abstract: Using the latest release of sector-level growth and productivity data up to 2015 from the EU KLEMS database, evidence is mounting that the global financial crisis (2008/09) and the Euro Area recession (2011/12) have significantly damaged the growth potential of European economies across the board. None of the countries in the 12 EU member states included in the analysis have recovered to growth rates anywhere near to what they were in the decade before the crisis. Slow productivity growth which was already visible in most market services sectors before the crisis has broadened to the goods-producing sector for most European economies since the crisis. The manufacturing sector was particularly hard hit, and has only partially recovered. The dynamics of the global and Euro Area crises and their impact seem still to be in full swing, making it too early to judge whether output and productivity growth rates can still recover to the pre-crises rate or whether growth in Europe will end up as a slower long-term trend. Classification-JEL: D24, O47, R11, Keywords: Productivity, Total Factor Productivity, Growth, Europe. Journal: International Productivity Monitor Pages: 8-23 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/vanArk_Jager.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:1 Template-Type: ReDIF-Article 1.0 Author-Name: Francisco Pérez Author-Email: francisco.perez@ivie.es Author-Name: Eva Benages Author-Email: eva.benages@ivie.es. Title: The Role of Capital Accumulation in the Evolution of Total Factor Productivity in Spain Abstract: GDP growth in Spain was strong for much of the last half century, whereas the country’s productivity performance during these years has been mediocre. The reasons for this situation have frequently been analysed with the focus on labour productivity. But, as this article highlights, the evolution of capital productivity should also be taken into account when looking for explanations for poor productivity performance. This article analyses the sources of growth in the Spanish economy, in comparison with major economies, and takes into account the effects that the improvements in the measurement of inputs (labour and capital) have on TFP estimates. Once problems are identified and the role played by labour and capital is evaluated, the paper analyses the possible causes for the negative results in terms of productivity in Spain and what policies can be considered to improve it. Classification-JEL: O47, D24, O52 Keywords: GDP Growth, Productivity, Spain. Journal: International Productivity Monitor Pages: 24-50 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/Perez_Benages.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:2 Template-Type: ReDIF-Article 1.0 Author-Name: André Hofman Author-Email: andre.hofman53@gmail.com Author-Name: Claudio Aravena Author-Email: claudio.aravena@un.org Author-Name: Jorge Friedman Author-Email: friedman2@gmail.com Title: Sources of Productivity and Economic Growth in Latin America and the Caribbean, 1990-2013 Abstract: This article examines growth experiences of 23 Latin American and English-speaking Caribbean countries from 1990 to 2013. We carry out three types of exercises. The first exercise for the 23 countries in the region uses the traditional methods to measure capital, labour, and efficiency or total factor productivity (TFP). The second exercise focuses on the Latin American countries only. The labour measure (L) is improved through the introduction of a quality adjustment to hours worked, while the capital measure includes capital services. The exercises reveal that as the input measures improve, the efficiency measure (TFP), which is usually positive and statistically explains a large share of observed growth, becomes increasingly negative for all groups of countries and all sub-periods. The only exception is the boom period of 2003–2008. A third exercise uses the LA-KLEMS database to disaggregate the data into nine industries. For each industry, we identify three characteristics of the labour factor and eight types of capital assets. The disaggregated data are only available for Argentina, Brazil, Chile, Colombia, and Mexico. Based on this more disaggregated analysis, we put forward hypotheses on the factors that determine growth and discuss implications for public policies. Classification-JEL: D24, N16, O47, O54 Keywords: Total Factor Productivity, Growth, Latin America. Journal: International Productivity Monitor Pages: 51-76 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/Hofman_Aravena_Friedman.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:3 Template-Type: ReDIF-Article 1.0 Author-Name: Ariel Coremberg Author-Email: acorem@econ.uba.ar Title: Argentina Was Not the Productivity and Economic Growth Champion of Latin America Abstract: The Kirchner administration (2002-2015) claimed that under their leadership Argentina experienced record-breaking GDP growth. However, this article shows that Argentina's GDP growth was underwhelming. Statistical estimates produced by the new Argentine government support the ARKLEMS project's evidence that the Kirchner administration overstated growth. Distortions were large and discretionary and affected all industries, independent of the downward bias of the Consumer Price Index and the Wholesale Price Index. New stylized facts counter the claims of the Kirchner administration. First, real GDP growth in the 2002-2015 period was weaker than in the 1990-1998 period. Second, GDP only grew in the subperiod 2002-2007 because of the commodities boom. Third, GDP growth in Argentina was second lowest among ten Latin American countries in the 1998-2015 period. Fourth, GDP growth during the 2002-2015 period was extensive in nature, based on factor accumulation, not total factor productivity, so was not sustainable. Classification-JEL: D24, N16, F43, O47 Keywords: Productivity, GDP Growth, Argentina, Consumer Price Index. Journal: International Productivity Monitor Pages: 77-90 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/Coremberg.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:4 Template-Type: ReDIF-Article 1.0 Author-Name: Harry X. Wu Author-Email: harry.wu@ier.hit-u.ac.jp Author-Name: Deb Kusum Das Author-Email: dkd_ramjas@yahoo.com Author-Name: K. L. Krishna Author-Name: Pilu Chandra Das Title: How Does the Productivity and Economic Growth Performance of China and India Compare in the Post-Reform Era, 1981-2011? Abstract: Applying an aggregate production possibility frontier (APPF) framework for growth accounting à la Jorgenson et al. to economy-wide Chinese and Indian industry productivity accounts, constructed in the spirit of the KLEMS principle, we estimate and compare growth and productivity performance in China and India over their post-reform period from 1981 to 2011. We show that during this period China grew over 50 per cent-faster than India in value added (9.4 versus 6.1 per cent per annum) but about 25 per cent-slower than India in TFP (0.83 versus 1.13 per cent per annum). The two economies also experienced very different growth and productivity performances over sub-periods distinguished by special policy regimes and governing systems. While both countries appeared to enjoy their best performances in the 2002-2007 period following China's WTO entry, China faltered much more in terms of total factor productivity growth in the wake of the global financial crisis. Classification-JEL: D24, N15, O47. Keywords: Growth, Productivity, Total Factor Productivity, China, India. Journal: International Productivity Monitor Pages: 91-113 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/Wu_Krishna_Das_Das.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:5 Template-Type: ReDIF-Article 1.0 Author-Name: Tsutomu Miyagawa Author-Email: tsutomu.miyagawa@gakushuin.jp Author-Name: Miho Takizawa Author-Email: ttakizawa@toyo.jp Author-Name: Konomi Tonogi Author-Email: uf04296kt@rissho-univ.jp Title: Can Intangible Investments Ease Declining Rates of Return on Capital in Japan? Abstract: Japan's economic growth has slowed since the collapse of the bubble economy in the 1990s due to low capital accumulation. We focus on the low rate of return on capital, which led to this slow capital accumulation, finding that it was caused by an increase in the capital-output ratio and low capital share. Not only has the rate of return on capital declined, but its variance across industries has increased, as has the number of industries with negative rates of return. We estimate a profit function in which the profit rate is explained not only by the real wage but also by intangibles. The estimation results show that investment in human resources increases the profit rate and that intangibles contribute to this increase through productivity improvement, especially in the IT industry. Our study implies that governments should implement a comprehensive innovation policy that stimulates investments not only in R&D, but also in IT and human resources. Classification-JEL: E22, D24, D25, H54 Keywords: Intangible Capital, Profit Function, Investment, Productivity. Journal: International Productivity Monitor Pages: 114-127 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/Miyagawa_Takizawa_Tonogi.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:6 Template-Type: ReDIF-Article 1.0 Author-Name: Michael S. Christian Author-Email: mschrist@gmail.com. Title: Net Investment and Stocks of Human Capital in the United States, 1975-2013 Abstract: This article continues the research initiated in Christian (2010, 2014) on measurement of human capital stocks and investment in the United States. It develops estimates of a series of human capital stock and net investment from 1975 to 2013, using the lifetime earnings approach of Jorgenson and Fraumeni (1989, 1992). The series decomposes net investment into investment from births, investment in education net of aging of persons enrolled in school, depreciation from aging of persons not enrolled in school, depreciation from deaths, and a residual term that includes net migration and measurement error. The study also discusses the cost-based approach of measurement in human capital of Kendrick (1976) and compares investment in education between the cost and income approaches. The stock of human capital rose at an annual rate of 1.0 per cent between 1977 and 2013, with population growth as the primary driver of human capital growth. Per capita human capital remained much the same over this period, with the effect of greater levels of education being offset by the effect of an aging population. Classification-JEL: E22, J24, O16 Keywords: Human Capital, Investment, Measurement, Cost-based Approach. Journal: International Productivity Monitor Pages: 128-149 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/Christian.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:7 Template-Type: ReDIF-Article 1.0 Author-Name: Dave Byrne Author-Email: david.m.byrne@frb.gov Author-Name: Carol Corrado Author-Email: Carol.Corrado@conference-board.org Title: ICT Prices and ICT Services: What Do They Tell Us About Productivity and Technology Abstract: This article reassesses the link between ICT prices, technology, and productivity. To understand how the ICT sector could come to the rescue of a whole economy, a multi-sector model developed by Oulton (2012) is extended to include ICT services and used to calibrate the steady-state contribution of the ICT sector to growth in aggregate U.S. labour productivity. The extended model also has implications for the relationship between prices for ICT services and prices for the ICT assets used to supply them, namely, that, ICT service prices may diverge from ICT asset prices and reflect productivity gains from ICT asset management by the sector. All told, because ICT technologies increasingly diffuse through the economy via purchased services (e.g. cloud services, data analytic services), they are not fully accounted for in the standard narrative of ICT’s contribution to economic growth. When this omission is corrected and the price indexes for ICT assets developed in Byrne and Corrado (2017a) are used to indicate the relative productivity of the ICT sector, its contribution to potential labour productivity growth is estimated to be substantially larger than generally thought — 1.4 percentage points per year. Classification-JEL: L86, O41, D24, E3 Keywords: Information and Internet Services, Labour Productivity, Prices, Multi-sector Growth Model, Economic Growth. Journal: International Productivity Monitor Pages: 150-181 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/Byrne_Corrado.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:8 Template-Type: ReDIF-Article 1.0 Author-Name: Marcel Timmer Author-Email: m.p.timmer@rug.nl Title: Productivity Measurement in Global Value Chains Abstract: Increasing fragmentation of production is posing new challenges to the measurement of productivity. Traditional approaches focus on firms, industries or countries as the unit of analysis. In this article we argue that studies of global value chains (GVCs) are needed. We introduce the GVC accounting approach as a complement to traditional KLEMS type productivity studies. We define cost shares and productivity growth and show how they can be empirically implemented using synthetic input-output tables. We discuss advantages of the new approach, provide caveats and outline new areas of research and statistics in order to better understand today’s global production systems. Classification-JEL: D24, E23 Keywords: Productivity, Global Value Chains, Productivity Growth, Production Systems. Journal: International Productivity Monitor Pages: 182-193 Volume: 33 Year: 2017 Month: Fall File-URL: http://www.csls.ca/ipm/33/Timmer.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:33:y:2017:9 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: THIS 34TH ISSUE OF THE International Productivity Monitor contains seven articles on a range of productivity-related topics: the potential gains from more competitive regulatory settings for real per capita GDP growth in Canada; the role of capital measurement issues in accounting for slower productivity growth in Canada; the achievement of productivity lift-off in New Zealand; the productivity implication of a country's position within Global Value Chains; explanations for the U.S. productivity slowdown; cyclical versus trend slowdowns in productivity growth; and the rise of the intangible economy. Classification-JEL: Y2 Keywords: Productivity, Canada, United States, Capital Measurement, Global Productivity, New Zealand, Global Value Chain, Total Factor Productivity, Europe, Productivity Puzzle, Intangible Capital, Intangible Economy Journal: International Productivity Monitor Pages: 1-2 Volume: 34 Year: 2018 Month: Spring File-URL: http://www.csls.ca/ipm/34/editor_overview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:34:y:2018:0 Template-type: ReDIF-Article 1.0 Author-Name: Aled ab Iorwerth Author-Email: aiorwerth@cmhc-schl.gc.ca Author-Name: Carlos Rosell Author-Email: carlos.rosell@canada.ca Title: The Gains from More Competitive Regulation Settings in Canada Abstract: This article explores potential gains for Canada from making its regulatory framework as competition friendly as that in the United States. We estimate standard cross-country GDP growth regressions incorporating the OECD's indicators of product market regulations (PMRs) that measure the extent to which regulations, laws and other rules inhibit product market competition. Based on the key point estimate (or the lower bound of its 95 per cent confidence interval), GDP per capita in Canada could be about 2.0 per cent (0.7 per cent) higher in the medium term (i.e. 5 years) and about 5.3 per cent (1.8 per cent) higher after 20 years as a result of making Canada's 2013 regulatory settings related to foreign direct investment (FDI) as competitive as in the United States. However, government actions taken since 2013 have improved the competitiveness of these regulations. As a result, further changes needed to reach the US benchmark are not as great as they were in 2013 and would not generate as substantial gains. Classification-JEL: O51, F21, F10 Keywords: Canada, Regulation, Competition, Foreign Direct Investment, Product Market Regulation Journal: International Productivity Monitor Pages: 3-20 Volume: 34 Year: 2018 Month: Spring File-URL: http://www.csls.ca/ipm/34/Iorwerth_Rosell.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:34:y:2018:1 Template-type: ReDIF-Article 1.0 Author-Name: Wulong Gu Author-Email: Title: Accounting for Slower Productivity Growth in the Canadian Business Sector after 2000: The Role of Capital Measurement Issues Abstract: Labour productivity growth and multifactor productivity (MFP) growth slowed in Canada and other advanced economies after 2000. This article focuses on the issues that are associated with measurement of capital and examines the roles of intangible capital, natural capital, public infrastructure capital and capacity utilization in explaining slower productivity growth. To do that, the article presents an extended growth accounting framework that is used to examine the role of the different types of capital in labour and multifactor productivity growth. It finds that about one quarter of the decline in multifactor productivity growth in the Canadian business sector between 1980-2000 and 2000-2015 was due to an increase in the use of produced capital required to extract natural resources in the oil and gas and mining sector and a decline in the utilization of capital in the manufacturing sector. The decline in labour and multifactor productivity growth after 2000 is not related to intangible capital and public infrastructure capital. Classification-JEL: O51, D24, J24, O47 Keywords: Canada. Productivity, Productivity Slowdown, Capital Measurement, Measurement Journal: International Productivity Monitor Pages: 21-39 Volume: 34 Year: 2018 Month: Spring File-URL: http://www.csls.ca/ipm/34/Gu.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:34:y:2018:2 Template-type: ReDIF-Article 1.0 Author-Name: Paul Conway Author-Email: paul.conway@productivity.govt.nz Title: Can the Kiwi Fly? Achieving Productivity Lift-off in New Zealand Abstract: New Zealand's poor long-run productivity performance has puzzled domestic economists and international observers for decades. To provide answers, this article sketches out the broad reasons why lifting productivity has proven so difficult. Against the background of ongoing changes in technology and in the global trading environment, the article also puts forward a number of high-level policy suggestions aimed at countering the economic forces that have constrained productivity, including opening the economy to new opportunities for international connection, and encouraging capital deepening, greater competition and more effective innovation. Getting this right requires a deep understanding of New Zealand's productivity track record and potential in the 21st century global economy and presents a major challenge for the New Zealand public sector. Classification-JEL: N37, O56, D24, O47, D24 Keywords: New Zealand, Productivity, Productivity Puzzle, Productivity Slowdown Journal: International Productivity Monitor Pages: 40-63 Volume: 34 Year: 2018 Month: Spring File-URL: http://www.csls.ca/ipm/34/Conway.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:34:y:2018:3 Template-type: ReDIF-Article 1.0 Author-Name: Chiara Criscuolo Author-Email: Chiara.CRISCUOLO@oecd.org Author-Name: Jonathan Timmis Author-Email: Jonathan.TIMMIS@oecd.org Title: The Changing Structure of Global Value Chains: Are Central Hubs Key for Productivity? Abstract: This article uses "centrality" metrics reflecting position within Global Value Chains (GVCs) to identify central hubs and peripheral European economies and sectors. We find evidence of large changes in the structure of European production networks, with rising importance of Eastern European economies coinciding with the timing of their EU accession. Using cross-country firm-level data from ORBIS, we find that changing structure of GVCs can play a role in the catch-up of firms, but the effects are heterogeneous across firms and countries. First, becoming more central is associated with faster productivity growth of firms in post-2004 EU members. Second, the average productivity (centrality weighted) of buyers/suppliers matters for the productivity of firms overall in other European economies, and particularly non-frontier (initially less productive) firms in both groups of countries. The results for post-2004 EU members suggest that policies to encourage integration into GVCs are particularly important for the productivity of emerging or less integrated economies, whereas for more advanced economies a more sophisticated policy is needed that encourages the formation of linkages with productive, frontier foreign firms and economies. Classification-JEL: N34, F66, O47, O20, O19 Keywords: Global Value Chains, GVCs, GVC, Productivity, Europe, European Union, Globalization, Globalisation, Post-2004, Post 2004 Journal: International Productivity Monitor Pages: 64-80 Volume: 34 Year: 2018 Month: Spring File-URL: http://www.csls.ca/ipm/34/Criscuolo_Timmis.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:34:y:2018:4 Template-type: ReDIF-Article 1.0 Author-Name: Alexander Murray Author-Email: alexander.murray@canada.ca Title: What Explains the Post-2004 U.S. Productivity Slowdown? Abstract: Economic theory and history show that labour productivity growth is the main driver of rising living standards, so changes in the trend rate of productivity growth have profound implications for a society's future prosperity. The average annual rate of business sector labour productivity growth in the United States declined by 1.9 percentage points between the 1995-2004 period and the 2004-2015 period, from 3.2 per cent to 1.3 per cent. This article summarizes the state of knowledge on the causes of the post-2004 slowdown in U.S. productivity growth. Official growth accounting estimates indicate that 60-65 per cent of the labour productivity decline is accounted for by a decline in total factor productivity growth, while 30-35 per cent is accounted for by a decline in the rate of capital deepening. Three industries account for over 80 per cent of the aggregate labour productivity decline: manufacturing, wholesale trade, and retail trade. The aggregate productivity slowdown is traceable to a decline in the productivity contributions arising from industries that produce or intensively use information and communication technology (ICT) products. Classification-JEL: N22, D24, O10, O47, O51 Keywords: United States, US, U.S., Productivity Slowdown, Productivity, 2004, Post 2004, Post-2004 Journal: International Productivity Monitor Pages: 81-109 Volume: 34 Year: 2018 Month: Spring File-URL: http://www.csls.ca/ipm/34/murray.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:34:y:2018:5 Template-type: ReDIF-Article 1.0 Author-Name: John Fernald Author-Email: john.fernald@insead.edu Title: Cyclical Downturn or Slowing Trend? A Review Article on Productivity Puzzles across Europe Abstract: Productivity Puzzles across Europe examines European productivity before, during, and since the Great Financial Crisis, with a special focus on country-specific labour-market institutions. This review emphasizes first, that European productivity growth has been slowing for decades - it is not just a recession and post-recession phenomenon. Second, the book's analysis of labour markets, which highlights incentives to hoard labour, is relevant for understanding cyclical fluctuations in total factor productivity (TFP) around that trend. For example, institutions in Germany encouraged use of intensive margins (hours per worker and maybe effort), so measured TFP fell sharply in the recession but then rebounded quickly. The labour-market analysis in the book sheds little light on the slowing TFP trend. Classification-JEL: Y3, D24, E20, N34, O52 Keywords: Recession, Downturn, Europe, Cyclical, Slowdown, Productivity, Productivity Puzzle, Review, Productivity Puzzles across Europe Journal: International Productivity Monitor Pages: 110-117 Volume: 34 Year: 2018 Month: Spring File-URL: http://www.csls.ca/ipm/34/fernald.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:34:y:2018:6 Template-type: ReDIF-Article 1.0 Author-Name: Chad Syverson Author-Email: chad.syverson@chicagobooth.edu Title: What's New About Capitalism?: A Review Article on Capitalism without Capital: The Rise of the Intangible Economy Abstract: I review Jonathan Haskel and Stian Westlake's recent book on intangible capital. It is an excellent introduction to and overview of the economics of intangibles. Using a combination of colorful examples and rigorous economic logic, it builds an interesting and useful reference for readers of many types, including academics, policymakers, and business people. While there is much left to be learned about the nature and role of intangible capital, this book will serve as a summary of what we know now as well as a roadmap for future explorations of the subject. Classification-JEL: Y3, D24 Keywords: Capitalism, Capital, Intangible, Intangible Capital, Intangible Economy, Review, Capitalism without Capital: The Rise of the Intangible Economy Journal: International Productivity Monitor Pages: 118-123 Volume: 34 Year: 2018 Month: Spring File-URL: http://www.csls.ca/ipm/34/syverson.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:34:y:2018:7 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: THIS 35TH ISSUE OF THE International Productivity Monitor contains eight articles featuring two individual articles and two symposia on a range of productivity-related topics. The topics of the two articles are employment and productivity in U.S. manufacturing and the role of demand and digitization in solving the productivity puzzle. The topic of the first symposium of four articles is explaining slower productivity growth since 2000 in Canada. The topic of the second symposium of two articles is the global productivity slowdown. Classification-JEL: Y2 Keywords: Productivity, Canada, United States, Capital Measurement, Global Productivity, New Zealand, Global Value Chain, Total Factor Productivity, Europe, Productivity Puzzle, Intangible Capital, Intangible Economy Journal: International Productivity Monitor Pages: 1-4 Volume: 35 Year: 2018 Month: Fall File-URL: http://www.csls.ca/ipm/35/editor_overview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:35:y:2018:0 Template-type: ReDIF-Article 1.0 Author-Name: Richard Schmalensee Author-Email: rschmal@mit.edu Title: Puzzles and Surprises in Employment and Productivity in U.S. Manufacturing After the Great Recession Abstract: Though U.S. manufacturing output recovered more slowly from the Great Recession than historical experience would have predicted, manufacturing employment, which peaked in 1979, grew between 2010 and 2017. This was the second-longest period of manufacturing employment growth in the entire postwar period. Linking these developments was an historically unprecedented, protracted absolute decline in labour productivity. This article provides an overview of these puzzling aggregate developments and of the diverse industrylevel changes they summarize. The roles of foreign competition, mis-measurement of real output, and the computer industry are explored, and the value of looking within multi-industry aggregates like manufacturing is illustrated. Classification-JEL: E24, O47 Keywords: United States, manufacturing, employment, productivity, Great Recession, foreign competition Journal: International Productivity Monitor Pages: 5-27 Volume: 35 Year: 2018 Month: Fall File-URL: http://www.csls.ca/ipm/35/Schmalensee.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:35:y:2018:1 Template-type: ReDIF-Article 1.0 Author-Name: Jaana Remes, Jan Mischke and Mekala Krishnan Author-Email: jaana remes@mckinsey.com Title: Solving the Productivity Puzzle: The Role of Demand and the Promise of Digitization Abstract: What is behind exceptionally weak productivity growth across many developed economies? We analyze seven countries (United States, Germany, France, UK, Italy, Spain, and Sweden) across six sectors (automotive, technology, retail, electric power, tourism, and finance) and examine supply and demand factors in the period from 2010 to 2014 compared to 2000 to 2004. For each sector, we combine economic analyses with McKinseys industry expertise to shed light on the microeconomic causes behind industry productivity performance. We find three waves collided to drive productivity growth across sectors: the waning of the impact of the 1990s information technology revolution; financial crisis aftereffects, including weak demand and uncertainty; and digital disruption which offers substantial opportunities to boost productivity growth but comes with lags and transition costs. We calculate that the first two waves dragged down productivity growth by 1.9 percentage points across countries since the mid-2000s, from 2.4 per cent to 0.5 per cent. As financial crisis aftereffects recede and more companies incorporate digital solutions, we expect productivity growth to recover, with productivity growth potential of at least 2 per cent per year across countries over the next decade. Classification-JEL: L86, O47 Keywords: productivity, digitization, demand, technology Journal: International Productivity Monitor Pages: 28-51 Volume: 34 Year: 2018 Month: Fall File-URL: http://www.csls.ca/ipm/35/Remes-Mischke-Krishnan.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:35:y:2018:2 Template-type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: John Tsang Author-Email: john.tsang@csls.ca Title: The Stylized Facts about Slower Productivity Growth in Canada Classification-JEL: N37, O56, D24, O47, D24 Abstract: Productivity growth in the Canadian economy has been considerably slower in the post-2000 period than in the pre-2000 period, with important implications for the growth in the living standards of Canadians. Output per hour in the business sector in Canada advanced at a 0.9 per cent average annual rate from 2000 to 2016 compared to 1.6 per cent from 1981 to 2000. The objective of this article is to highlight the stylized facts of this important development. It first examines trends in both labour productivity and total factor productivity (TFP) at the aggregate level. It discusses growth accounting estimates of changes in the sources of labour productivity growth. Labour and total factor productivity estimates are provided for 15 industries, highlighting which industries experienced the largest slowdown in absolute terms and the industry contributions to the slowdown. Manufacturing is found to be the industry making the largest contribution to both the labour productivity and TFP slowdowns. Contributions of within-industry productivity growth and re-allocation effects to aggregate productivity growth are also examined. Keywords: Productivity, Canada, TFP, labour, manufacturing Journal: International Productivity Monitor Pages: 52-72 Volume: 35 Year: 2018 Month: Fall File-URL: http://www.csls.ca/ipm/35/IPM-35-Sharpe-Tsang.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:35:y:2018:3 Template-type: ReDIF-Article 1.0 Author-Name: Wulong Gu Author-Email: wulong.gu@canada.ca Author-Name: Michael Willox Author-Email: michael.willox@canada.ca Title: Productivity Growth in Canada and the United States: Recent Industry Trends and Potential Explanations Abstract: Labour productivity growth in Canada was weaker than that in the United States from the mid-1980s to 2010, leading to a decline in Canada’s relative productivity level. This situation was mainly due to the lower multifactor productivity (MFP) growth experienced in most Canadian industries in that period. After 2010, however, the pattern reversed itself as labour productivity growth in Canada exceeded that of the United States. Higher labour productivity growth in Canada for the 2010-2014 period was due to a relatively larger capital deepening effect and relatively higher MFP growth. Both these developments were associated with stronger output growth and stronger demand in Canada. In addition, the contributions of ICT producing and ICT intensive using industries to U.S. labour productivity growth waned after 2010. For Canada, ICT producing industries contributed little to overall labour productivity before and after 2010, while ICT intensive using industries exhibited stronger productivity growth after 2010. The latter may reflect the more moderate ICT investment in Canada compared to the United States in the 1990s and early 2000s and the more gradual realization of benefits of ICT usage. Classification-JEL: J24, D24, L86, O47 Keywords: Productivity, Canada, United States, multi-factor, capital, ICT Journal: International Productivity Monitor Pages: 73-94 Volume: 35 Year: 2018 Month: Fall File-URL: http://www.csls.ca/ipm/35/Gu-Willox.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:35:y:2018:4 Template-type: ReDIF-Article 1.0 Author-Name: Jeff Mollins Author-Email: jmollins@bank-banque-canada.ca Author-Name: Pierre St-Amant Author-Email: pstamant@bank-banque-canada.ca Title: The Productivity Slowdown in Canada: an ICT Phenomenon? Abstract: We ask whether a weaker contribution of information and communication technologies (ICT) to productivity growth could account for the productivity slowdown observed in Canada since the early 2000s. To answer this question, we consider several models which capture channels by which ICT could affect productivity growth. Our results indicate that ICT continues to contribute to productivity growth, but that this contribution has declined and consequently accounts for part of the productivity growth slowdown. However, the productivity slowdown and the change in the contribution of ICT do not seem to have the same timing. While productivity growth slowed in the early 2000s, the ICT contribution does not appear to have fallen until around the Great Recession. This prompts the conclusion that while ICT had little to no role in the initial productivity slowdown, it has been a major determinant of the subdued productivity growth since 2007-2009. Classification-JEL: L86, O14, D24 Keywords: ICT, productivity, Canada Journal: International Productivity Monitor Pages: 95-112 Volume: 35 Year: 2018 Month: Fall File-URL: http://www.csls.ca/ipm/35/Mollins-St-Amant.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:35:y:2018:5 Template-type: ReDIF-Article 1.0 Author-Name: Michelle Alexopoulos and Jon Cohen Author-Email: malex@chass.utoronto.ca Title: Canadian Productivity Growth, Secular Stagnation, and Technological Change Abstract: In this article, we show first that the recent slowdown in productivity growth in Canada, similar to that in the United States, can be attributed at least in part to the fall-off in the commercialization of new technologies. Using our bookbased indicators of technological change, we are able to show that this is true for both aggregate measures of technology and, at the disaggregate level, for mechanical/manufacturing and electrical technologies. Our results also indicate that the productivity impact of the slowdown in Canada is much greater on goods-producing industries than it is on services. Second, our latest results suggest that, contrary to the concerns of some that we are entering a new period of secular stagnation characterized by low productivity and economic growth, we are actually on the threshold of significant new technological breakthroughs, associated largely, but not only, with advances in artificial intelligence (AI) and robotics. Provided that Canadian firms adopt these innovations, we can anticipate not a continuation of slow productivity growth but an acceleration. Classification-JEL: L86, O14, D24 Keywords: productivity, technological, growth, AI Journal: International Productivity Monitor Pages: 113-137 Volume: 35 Year: 2018 Month: Fall File-URL: http://www.csls.ca/ipm/35/Alexopoulos-Cohen.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:35:y:2018:6 Template-type: ReDIF-Article 1.0 Author-Name: John Fernald Author-Email: john.fernald@insead.edu Title: Is Slow Productivity and Output Growth in Advanced Economies the New Normal? Abstract: Advanced economies have seen a notable slowdown in potential growth in the past decade or so. Demographics look much less favorable to output growth than in the past, and productivity growth has been only modest. The demographic and productivity factors driving this slowdown in potential growth look to be largely independent of the Great Recession. These factors do not at this point look likely to change rapidly, despite considerable uncertainty about the future contribution of artificial intelligence and robots. Classification-JEL: J11, O14, D24 Keywords: productivity, growth, output Journal: International Productivity Monitor Pages: 138-148 Volume: 35 Year: 2018 Month: Fall File-URL: http://www.csls.ca/ipm/35/Fernald.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:35:y:2018:7 Template-type: ReDIF-Article 1.0 Author-Name: Kevin Fox Author-Email: K.Fox@unsw.edu.au Title: What Do We Know About the Productivity Slowdown? Evidence from Australian Industry Data Abstract: The productivity slowdown across industrialised countries since around 2004 is a topic of much interest to academic researchers and policy makers alike. As we search for explanations for the slowdown, it is useful to consider what the performance has been at the industry level. This article provides some evidence and perspectives from official Australian industry-level data. While industries have experienced different productivity growth profiles since 1989-90, they all experienced a slowdown after 2003-04. A rise in inefficiency may be one source of this slowdown. Some suggestions for future research directions that may provide a deeper understanding of productivity growth are suggested, in the spirit of a slowdown being too valuable to waste. Classification-JEL: O40, D24 Keywords: multi-factor, industries, Australia, productivity, inefficiency Journal: International Productivity Monitor Pages: 149-156 Volume: 35 Year: 2018 Month: Fall File-URL: http://www.csls.ca/ipm/35/Fox.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:35:y:2018:8 Template-Type: ReDIF-Article 1.0 Author-Name: Dale W. Jorgenson Author-Email: djorgenson@fas.harvard.edu Title: Introduction Abstract: THIS 36TH ISSUE OF THE International Productivity Monitor, guest edited by Dale Jorgenson from Harvard University, features nine papers from the Fifth World KLEMS Conference held at the Kennedy School at Harvard University in June 2018. Dale Jorgenson has also written an introduction to the issue. These articles represent the most recent international research on productivity issues from a growth accounting perspective. Classification-JEL: O40 Keywords: Productivity, United States, Norway, United Kingdom, Spain, Latin America, Capital Measurement, Global Productivity, Labour Productivity, Total Factor Productivity Journal: International Productivity Monitor Pages: 1-6 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Jorgenson_editor.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:0 Template-type: ReDIF-Article 1.0 Author-Name: Jon Samuels Author-Email: jon.samuels@bea.gov Author-Name: Erich Strassner Author-Email:erich.strassner@bea.gov Title: Toward a Global Integrated Industry-level Production Account: A Proposal Abstract: This article develops the framework for a global production account. We describe the relationship between existing KLEMS approaches and databases, international guidelines on GDP and productivity measurement, and our proposal toward a global integrated production account. The key feature of the account is an integrated world input-output table in current and constant prices, augmented with constant quality prices and quantities for primary factor inputs by industry, all converted with conceptually appropriate purchasing power parities. Uses of the framework include: 1) industry and country-level contributions to world economic growth, 2) price level indexes that serve as measures of industry-level competitiveness across countries, 3) total factor productivity level comparisons at the industry level, and 4) global production chain analysis. None of these are applications are currently possible with existing country-industry-level KLEMS databases. Classification-JEL: O40, D57 Keywords: World Economic Growth, Industry-Level Competitiveness, Total Factor Productivity, Global Production Chain Analysis Journal: International Productivity Monitor Pages: 7-33 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Samuels_Strassner.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:1 Template-type: ReDIF-Article 1.0 Author-Name: Robert Inklaar Author-Email: r.c.inklaar@rug.nl Author-Name: Pieter Woltjer Author-Email: p.j.woltjer@gmail.com Author-Name: Daniel Gallardo Albarrán Author-Email: Daniel.Gallardoalbarran@wur.nl Title: The Composition of Capital and Cross-Country Productivity Comparisons Abstract: The role of physical capital is typically found to be limited in accounting for differences in GDP per worker, but this result may be because capital is customarily assumed to be a homogenous unit. This assumption is misleading, as different types of capital assets have different marginal products and richer countries tend to invest more in high-marginal product assets. We take this perspective to a global dataset, the Penn World Table, to improve cross-country productivity comparisons. We show that, properly measured, differences in capital input can account for a greater share of income variation, but (total factor) productivity differences remain dominant. Classification-JEL: O47, D24 Keywords: Cross-Country Productivity Comparisons, Total Factor Productivity, Capital Journal: International Productivity Monitor Pages: 34-52 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Inklaar_etal.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:2 Template-type: ReDIF-Article 1.0 Author-Name: Cecilia Jona-Lasinio Author-Email: cjonalasinio@luiss.i Author-Name: Valentina Meliciana Author-Email: vmeliciani@luiss.it Title: Global Value Chains and Productivity Growth: Does Intangible Capital Matter? Abstract: This article investigates the impact of participation in global value chains (GVCs) on productivity growth considering the mediating effect of investment in intangible assets. We explore the existence of synergies between intangible capital accumulation and GVC participation and their influence on productivity in a sample of nine European economies in 1998-2013. The analysis relates the macroeconomic literature on the impact of intangibles and GVCs on productivity growth to microeconomic studies about the functions of intangibles along the value chain. The existence of complementarities between intangibles and GVC participation and their productivity effects are tested in an augmented production function framework. We find: a) positive and statistically significant productivity impact of backward participation; b) the marginal effect of GVC participation on growth is greater in countries-industries with higher intensity of intangible capital; c) non-R&D intangibles, and particularly organizational capital, exert a significant conditional effect on backward participation strengthening the productivity returns of global production activity. Classification-JEL: F65, E22 Keywords: Global Value Chains, Intangible Capital, Augmented Production Function, Europe Journal: International Productivity Monitor Pages: 53-78 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Jona-Lasinio_Meliciana.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:3 Template-type: ReDIF-Article 1.0 Author-Name: Gang Liu Author-Email: gang.liu@ssb.no Title: Structural Change and Productivity in the Market Economy of Mainland Norway, 1997-2014 Abstract: Based on a newly compiled Norwegian KLEMS database, this article investigates structural change and productivity in the market economy of mainland Norway for the 1997-2014 period. The findings largely confirm the general trends identified by many other studies. However, detailed sector analyses reveal substantial differences within both goods production and services sectors. In addition, an increased share of skilled labour in value added is found for the total market economy over the entire period, as well as for almost all the sectors, at least for the latter period (2008-2014). For the total market economy, the shares in value added of both software and R&D capital increased, while those of hardware decreased, for the whole period. With a few exceptions, this finding also holds for most of the sectors, at least for the latter period (2008-2014). Finally, test results indicate that the complementarity hypothesis between ICT capital and skilled labour is not supported, but that between Intellectual Property Products (IPP), and esp. R&D capital, and highly skilled labour is supported, implying that intangible assets combined with human capital had been playing an increasingly important role in recent economic growth in Norway. Classification-JEL: J24, M15 Keywords: Norway, Skilled Labour, Value Added, Intangible Assets, Human Capital Journal: International Productivity Monitor Pages: 79-109 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Liu.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:4 Template-type: ReDIF-Article 1.0 Author-Name: Nicholas Oulton Author-Email: n.oulton@lse.ac.uk Title: The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key? Abstract: A new explanation for the UK and developed world productivity puzzle is proposed which grafts the Lewis (1954) model onto a standard Solow growth model. What is called here the neo-Lewis model is identical to the Solow model in good times. But in bad times foreign demand for a country’s exports is constrained below potential supply. This makes labour productivity growth depend negatively on the growth of labour input and positively on the growth of export demand.The predictions of the neo-Lewis model are tested on data for 23 countries (20 EU and 3 non-EU) and find support. It is also argued that the neo-Lewis model can explain the fall in TFP growth, in the UK and elsewhere, after 2007. This proposition also finds support when tested on a larger sample of 52 countries. Classification-JEL: O0, O41 Keywords: United Kingdom, Productivity Puzzle, Neo-Lewis Model Journal: International Productivity Monitor Pages: 110-141 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Oulton.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:5 Template-type: ReDIF-Article 1.0 Author-Name: Joji Tokui Author-Email: : tokui@shinshu-u.ac.jp Author-Name: Takeshi Mizuta Author-Email: takeshi.mizuta@gmail.com Title: Japan's Prefectural-Level KLEMS: Productivity Comparisons and Service Price Differences Abstract: We compile a prefectural-level KLEMS database for Japan and conduct productivity comparisons for Japanese 47 prefectures. One of the difficulties in compiling regional KLEMS database is how to handle variation in service prices across regions. To cope with this problem, we estimated cross-regional pricelevel differences in each industry in the service sector based on prefectural-level item-wise data of service prices. For estimation, we applied the Country-ProductDummy (CPD) method, a method used to estimate absolute purchasing power parities among countries. As a result of re-calculation, the standard deviation of cross-regional TFP difference indices in 2009 decreased by around 13 per cent. In addition, by using the derived cross-regional price difference indices, we confirmed that the Balassa-Samuelson effect, which holds among international economies, also holds among regional economies in Japan. Classification-JEL: C21, F31 Keywords: Japan, Cross-Regional Price Level Differences, Country-Product Dummy, Total Factor Productivity Journal: International Productivity Monitor Pages: 142-160 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Tokui_Muzuta.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:6 Template-type: ReDIF-Article 1.0 Author-Name: Dale Jorgenson Author-Email: djorgens@fas.harvard.edu Author-Name: Mun Ho Author-Email: munho@seas.harvard.edu Author-Name: Jon Samuels Author-Email: jon.samuels@bea.gov Title: Educational Intensity and the Sources of, and Prospects for, U.S. Economic Growth Abstract: We identify a new mechanism whereby education impacts economic growth: industry educational intensity. We define educational intensity as the share of an industry’s workforce with a college degree and above and use this new classification to build estimates of the sources of U.S. economic growth from the bottom up across industries. We find that that since 1995, the contribution of education intensive industries to aggregate value added growth exceeds that of non-education intensive industries and that this difference was driven by larger contributions of capital, labour, and TFP growth in these industries. The shift toward educationally intensive industries has not been enough to revive aggregate labour productivity and GDP growth over the medium term; we find that growth over the next ten years will be restrained by slower growth in capital and labour quality. Classification-JEL: J24, O47 Keywords: Industry Educational Intensity, Capital, Labour, Total Factor Productivity, Growth Journal: International Productivity Monitor Pages: 161-186 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Jorgenson_etal.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:7 Template-type: ReDIF-Article 1.0 Author-Name: Corby Garner Author-Email: garner.corby@bls.gov Author-Name: Justin Harper Author-Email: Justin.Harper@bea.gov Author-Name: Thomas F. Howells III Author-Email: Thomas.Howells@bea.gov Author-Name: Matt Russell Author-Email: Russell.Matthew@bls.gov Author-Name: Jon Samuels Author-Email: jon.samuels@bea.gov Title: New BEA-BLS Estimates of the Sources of U.S. Economic Growth between 1987 and 2016 Abstract: This article describes new historical statistics for the BEA-BLS integrated industry-level production account. The dataset includes KLEMS and integrated MFP measures that are consistent with the official BEA GDP by Industry statistics and now covers 1987-2016. The most important source of economic growth over the period was the accumulation of capital input. More than three quarters of the contribution of capital was driven by the accumulation of capital inputs in the service sector. The next most important source of economic growth over the period was the accumulation of labour input. Growth in labour input in the services sectors accounted for almost all the economy-wide contribution of labor input. MFP growth accounted for about twenty percent of aggregate economic growth. Of this, the manufacturing sector contributed more than half of this growth, but almost all of this was due to growth in MFP of the computer electronic products industry. Finally, the new dataset shows that the decline in the aggregate income share paid to labour in the manufacturing sector was mostly due to a decrease in the share of income paid to workers without a college degree. In contrast, workers with a college degree accounted for most of the increase in the income share of labour in the service sectors. Classification-JEL: J24, O14 Keywords: Capital Inputs, Service Sector, Labour Inputs, MPG Growth Journal: International Productivity Monitor Pages: 187-203 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Garner_etal.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:8 Template-type: ReDIF-Article 1.0 Author-Name: Matilde Mas Author-Email: matilde.mas@ivie.es Author-Name: Andre Hofman Author-Email: andre.hofman53@gmail.com Author-Name: Eva Benages Author-Email:eva.benages@ivie.es Title: Knowledge Intensity in a Set of Latin American Countries: Implications for Productivity Abstract: This article proposes to measure the knowledge intensity of economies with an alternative approach to those based on the aggregation of industries according to their R&D expenditure or the qualification of the workforce. The proposed metric is based on the economic valuation of productive services provided by a set of assets that incorporate knowledge, specifically human capital and information and communication technologies (ICT). Rather than using a single indicator to measure knowledge intensity, we follow an economic approach rooted in a growth accounting methodology, determining the contribution of each individual asset according to the prices of the services they provide. This methodology is applied to four Latin-American (LA) countries, namely Brazil, Chile, Colombia and Mexico, taking the United States and Spain as benchmarks for the period 2000-2016. Classification-JEL: J24, O32 Keywords: R&D Expenditure, Human Capital, Information and Communication Technologies, Latin-America Journal: International Productivity Monitor Pages: 204-233 Volume: 36 Year: 2019 Month: Spring File-URL: http://www.csls.ca/ipm/36/Mas_etal.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:36:y:2019:9 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: The 37th issue of the International Productivity Monitor contains seven articles. The topics are a comparison of the productivity growth slowdown between Europe and the United States; firm-level evidence on the impact of digitalization on productivity; the impact of the China shock on innovation and productivity in Canadian manufacturing; productivity dispersion at the firm level in Canada; the role of R&D in productivity improvement; consistency issues on the construction of productivity indices; and the state of productivity research. Classification-JEL: O4 Keywords: Productivity, Innovation, Economic growth, Firm-level analysis Journal: International Productivity Monitor Pages: 1-2 Volume: 37 Year: 2019 Month: Fall File-URL: http://www.csls.ca/ipm/37/editors.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:37:y:2019:0 Template-Type: ReDIF-Article 1.0 Author-Name: Robert J. Gordon Author-Email: rjg@northwestern.edu Author-Name: Hassan Sayed Title: The Industry Anatomy of the Transatlantic Productivity Growth Slowdown: Europe Chasing the American Frontier Abstract: By merging KLEMS data covering 16 industry groups within the total economy and 11 manufacturing sub-industries, we compare and contrast productivity growth from 1950 to 2015 in the United States with an aggregate of the ten largest European nations (EU-10) from 1972 to 2015. We interpret the EU-10 performance as catching up to the United States in stages. Strikingly, the total economy "early-to-late" productivity growth slowdown from 1972-1995 to 2005-2015 in the EU-10 (-1.68 percentage points) was almost identical to the U.S. slowdown from 1950-1972 to 2005-2015 (-1.67 percentage points). There is a very high EU-U.S. correlation in the magnitude of the early-to-late slowdown in each industry, suggesting that the productivity growth slowdown from the early postwar years to the most recent decade was due to a retardation in technical change that affected the same industries by roughly the same magnitudes on both sides of the Atlantic. Classification-JEL: O4, F4 Keywords: Productivity growth, Europe, United States Journal: International Productivity Monitor Pages: 3-38 Volume: 37 Year: 2019 Month: Fall File-URL: http://www.csls.ca/ipm/37/Gordon.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:37:y:2019:1 Template-Type: ReDIF-Article 1.0 Author-Name: Peter Gal Author-Email: peter.gal@oecd.org Author-Name: Giuseppe Nicoletti Author-Email: giuseppe.nicoletti@oecd.org Author-Name: Christina von Rüden Author-Email: christina.vonrueden@oecd.org Author-Name: Stéphane Sorbe Author-Email: stephane.sorbe@oecd.org Author-Name: Théodore Renault Author-Email: theodorerenault@gmail.com Title: Digitalization and Productivity: In Search of the Holy Grail - Firm-level Empirical Evidence from European Countries Abstract: This article assesses how the adoption of a range of digital technologies affects firm productivity. It combines cross-country firm-level data on productivity and industry-level data on digital technology adoption in an empirical framework that accounts for firm heterogeneity. The results provide robust evidence that digital adoption in an industry is associated to productivity gains at the firm level. Effects are relatively stronger in manufacturing and routine-intensive activities. They also tend to be stronger for more productive firms and weaker in the presence of skill shortages, which may relate to the complementarities between digital technologies and other forms of capital (e.g. skills, organisation, or intangibles). As a result, digital technologies may have contributed to the growing dispersion in productivity performance across firms. Hence, policies to support digital adoption should go hand in hand with creating the conditions to enable the catch-up of lagging firms, notably by easing access to skills. Classification-JEL: O3, O4 Keywords: Productivity, Innovation, Digital economy, Technology adoption, Skills Journal: International Productivity Monitor Pages: 39-71 Volume: 37 Year: 2019 Month: Fall File-URL: http://www.csls.ca/ipm/37/OECD.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:37:y:2019:2 Template-Type: ReDIF-Article 1.0 Author-Name: Myeongwan Kim Author-Email: myeongwan.kim@mail.utoronto.ca Title: Does Import Competition Reduce Domestic Innovation? Evidence from the China Shock and Firm-level Data on Canadian Manufacturing Abstract: A key economic issue in Canada is the declining business research and development in manufacturing since the early 2000s. Accompanying this, total factor productivity (TFP) growth in manufacturing slowed after 2000. To deepen our understanding of this phenomenon, we focus on the increasing Chinese import share in the total domestic absorption in Canadian manufacturing since the early 2000s, which appears to be driven by positive supply shocks within Chinese manufacturing. Based on firm-level data in Canadian manufacturing, we find that rising Chinese import competition led to declines in R&D expenditure and TFP growth within firms but reallocated employment towards more productive firms and induced less productive firms to exit. The negative within-effects were pronounced for firms that were initially smaller, less profitable, and less productive. At the aggregate level, the positive reallocation effects on TFP more than offset the negative within-effect. We estimate that, had there been no increase in Chinese import competition between 2005 and 2010, TFP in Canadian manufacturing would have declined by 1.26 per cent per year instead of the actual 1.09 per cent per year over this period. Classification-JEL: F14, F61, O3 Keywords: Import competition, Innovation, China, Canada, Firm-level analysis, Productivity Journal: International Productivity Monitor Pages: 40-95 Volume: 37 Year: 2019 Month: Fall File-URL: http://www.csls.ca/ipm/37/Kim.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:37:y:2019:3 Template-Type: ReDIF-Article 1.0 Author-Name: Wulong Gu Author-Email: wulong.gu@canada.ca Title: Frontier Firms, Productivity Dispersion and Aggregate Productivity Growth in Canada Abstract: Labour productivity growth in the business sector in Canada fell off after 2000. This article examines how innovation, innovation diffusion across firms, and business dynamism affected the productivity slowdown. The article found that both innovation and diffusion of innovation declined in Canada after 2000, contributing to the decline in labour productivity growth in that period. However, their relative contribution to the productivity slowdown is sensitive to the methods adopted. The results from a productivity decomposition into contributions of frontier firms (defined as the top 10 per cent most productive firms in an industry) and non-frontier firms show that the slowdown in the diffusion of innovation is a main source of the productivity slowdown after 2000. In contrast, the results from a stochastic frontier analysis show that the decline in innovation is the main source of the productivity slowdown after 2000. Finally, this article found that resource reallocation declined in Canadian firms after 2000, contributing to the decline in aggregate labour productivity growth in the business sector in that period. Classification-JEL: Keywords: Productivity, Frontier firms, Canada Journal: International Productivity Monitor Pages: 96-119 Volume: 37 Year: 2019 Month: Fall File-URL: http://www.csls.ca/ipm/37/Gu.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:37:y:2019:4 Template-Type: ReDIF-Article 1.0 Author-Name: Jianmin Tang Author-Email: jianmin.tang@canada.ca Author-Name: Weimin Wang Author-Email: weimin.wang@canada.ca Title: Is R&D Enough in Improving Firm Productivity? Abstract: Research and development (R&D) is critical to innovation that enhances productivity. Going beyond a simple relationship between R&D and firm productivity performance, this article investigates what co-investments and other business operating conditions facilitate R&D in improving productivity. Using a rich micro database for Canada, we show that the actual effect of R&D on productivity depends on a number of factors that play important roles in determining R&D efficiency in improving productivity. These factors include adopting certain management practices, making investments in ICT, and maintaining a skilled workforce. In addition, the article shows that firm size, foreign ownership and market power are important positive forces in improving R&D efficiency. The findings highlight the complexity of R&D in improving productivity, which calls for more sophisticated programs to encourage R&D activities and to improve R&D efficiency. Classification-JEL: O32, O4 Keywords: Research and development, Innovation, Productivity Journal: International Productivity Monitor Pages: 120-143 Volume: 37 Year: 2019 Month: Fall File-URL: http://www.csls.ca/ipm/37/Tang.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:37:y:2019:5 Template-Type: ReDIF-Article 1.0 Author-Name: Bert M. Balk Author-Email: bbalk@rsm.nl Title: Consistency Issues in the Construction of Annual and Quarterly Productivity Indices Abstract: Productivity change is generically measured in index form as ratio of output quantity index over input quantity index. Several statistical agencies publish quarterly as well as annual productivity indices, constructed from what appear to be basically the same sources. This raises the question whether, apart from measurement errors, consistency between quarterly and annual indices can be expected. This article explores, from a theoretical perspective, the options for obtaining consistency between annual and quarterly (or more general: between period and sub-period) measures of productivity change. Classification-JEL: O4, C56 Keywords: Index numbers, Productivity, Annual, Quarterly Journal: International Productivity Monitor Pages: 144-155 Volume: 37 Year: 2019 Month: Fall File-URL: http://www.csls.ca/ipm/37/Balk.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:37:y:2019:6 Template-Type: ReDIF-Article 1.0 Author-Name: Marshall Reinsdorf Author-Email: MReinsdorf@imf.org Title: The Oxford Handbook of Productivity Analysis edited by Emili Grifell-Tatjé, Knox Lovell and Robin Sickles: A Review Article Abstract: As a key concern both for policymakers and businesses, productivity is the focus of a large body of academic and statistical agency research. The range of measurement approaches and analytical findings is so wide that keeping up with the field is a real challenge. The Oxford Handbook of Productivity Analysis published by Oxford University Press in 2018 provides a broad overview of productivity measurement and analysis followed by in-depth explanations of many productivity techniques and findings. In addition, the Handbook addresses topics of interest to users and compilers of national accounts and price statistics, such as hard-to-measure services of businesses and the public sector, and branches out into emerging areas of indicators of well-being. Classification-JEL: Y3, O4 Keywords: Productivity Journal: International Productivity Monitor Pages: 156-161 Volume: 37 Year: 2019 Month: Fall File-URL: http://www.csls.ca/ipm/37/Reinsdorf.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:37:y:2019:7 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: The 38th issue of the International Productivity Monitor contains seven articles. The topics are the impact of trust on productivity; the relationship between zombie firms, exit barriers and productivity; a three-article symposium on the sources of the Transatlantic productivity slowdown; the World Bank perspective on productivity; and productivity measurement in higher education. Classification-JEL: O4 Keywords: Productivity, Innovation, Economic growth, Firm-level analysis Journal: International Productivity Monitor Pages: 1-2 Volume: 38 Year: 2020 Month: Spring File-URL: http://www.csls.ca/ipm/38/EO.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:38:y:2020:0 Template-Type: ReDIF-Article 1.0 Author-Name: Conal Smith Author-Email: conal.smith@vuw.ac.nz Title: Trust and Total Factor Productivity: What Do We Know About Effect Size and Causal Pathways? Abstract: This article explores what is known about the relationship between trust and total factor productivity (TFP). Generalized interpersonal trust is widely considered the best summary measure for social capital, and if this is the case the impact of trust should be reflected in estimates of TFP. A systematic review of the literature on trust, incomes, growth, and TFP finds relatively few articles on the latter despite a developed literature on trust, income, and growth. Using a development accounting framework, a simple model of the relationship between trust and TFP is set out and the size of the impact of trust on TFP is estimated empirically using a cross-country panel dataset based on the European Social Survey (ESS). Despite the limitations of the ESS, estimates of the magnitude of the impact of trust on TFP are broadly similar to those from the only other similar study identified (Bjornskov and Meon, 2015), which is based on the World Values Survey. A counterfactual estimate of TFP is used to illustrate the magnitude of the effect of trust on TFP, highlighting that the impact of trust is non-trivial in real terms, even for high-trust countries. Classification-JEL: J0, O4, Z10 Keywords: Productivity growth, Total Factor Productivity, trust, social capital, Europe Journal: International Productivity Monitor Pages: 3-28 Volume: 38 Year: 2020 Month: Spring File-URL: http://www.csls.ca/ipm/38/Smith.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:38:y:2020:1 Template-Type: ReDIF-Article 1.0 Author-Name: Christian Osterhold Author-Email: christian.osterhold@alumni.novasbe.pt Author-Name: Ana Fontoura Gouveia Author-Email: ana.cf.gouveia@gmail.com Title: Productivity, Zombie Firms and Exit Barriers in Portugal Abstract: Productivity growth is slowing in OECD countries, coupled with increased misallocation of resources. A recent strand of literature focuses on the role of non-viable firms “zombie firms” to explain these developments. Using a rich firm-level dataset for Portugal, we explore the role played by zombies in firm dynamics and the misallocation of labour and capital. We confirm the results on the high presence of zombie firms, which are significantly less productive than their healthy counterparts and drag down aggregate productivity. Higher zombie presence is associated with lower growth of viable firms, stifling intra-sectoral capital reallocation. Portugal has shown one of the largest reductions in barriers to exit and restructuring of all OECD countries and is therefore particularly suited for an assessment of the extensive margin effects of these policy changes. We show that a reduction in exit and restructuring barriers promotes a more effective exit channel and fosters the restructuring of the most productive zombies. The results highlight the role of public policy in addressing zombies’ prevalence, fostering a more efficient resource allocation, and promoting productivity growth. Classification-JEL: L25, D24, O47 Keywords: Portugal, Zombie Firms, productivity, firm exit Journal: International Productivity Monitor Pages: 29-49 Volume: 38 Year: 2020 Month: Spring File-URL: http://www.csls.ca/ipm/38/Osterhold_Gouveia.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:38:y:2020:2 Template-Type: ReDIF-Article 1.0 Author-Name: Robert J. Gordon Author-Email: rjg@northwestern.edu Author-Name: Hassan Sayed Author-Email: hsayed@princeton.edu Title: Transatlantic Technologies: The Role of ICT in the Evolution of U.S. and European Productivity Growth Abstract: We examine the role of the ICT revolution in driving productivity growth behavior for the United States and an aggregate of ten Western European nations (the EU-10) from 1977 to 2015. We find that the standard growth accounting approach is deficient when it separates sources of growth between ICT capital deepening and TFP growth, because much of the effect of the ICT revolution was channeled through spillovers to TFP growth rather than being limited to the capital deepening pathway. Using industry-level data from EU KLEMS, we find that most of the 1995-2005 U.S. productivity growth revival was driven by ICT-intensive industries producing market services and computer hardware. In contrast the EU-10 experienced a 1995-2005 growth slowdown due to a paucity of ICT investment, a failure to capture the efficiency benefits of ICT, and performance shortfalls in specific industries including ICT production, finance-insurance, retail-wholesale, and agriculture. After 2005 both the United States and the EU-10 suffered a growth slowdown, indicating that the benefits of the ICT revolution were temporary rather than providing a new permanent era of faster productivity growth. Classification-JEL: O, P Keywords: Europe, Productivity Growth, ICT, ICT Policy, United States Journal: International Productivity Monitor Pages: 50-80 Volume: 38 Year: 2020 Month: Spring File-URL: http://www.csls.ca/ipm/38/Gordon.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:38:y:2020:3 Template-Type: ReDIF-Article 1.0 Author-Name: Martin Neil Baily Author-Email: mbaily@brookings.edu Author-Name: Barry P. Bosworth Author-Email: bbosworth@brookings.edu Author-Name: Siddhi Doshi Author-Email: sdoshi@brookings.edu Title: Lessons from Productivity Comparisons of Germany, Japan, and the United States Abstract: Germany, Japan and the United States are the three largest mature economies and set the productivity frontier in most industries. In aggregate, Germany caught up to US productivity by the 1990s but Japan remains well below the leaders and has the potential for faster growth. The article estimates the industry productivity leaders in the 1990s and whether lagging industries subsequently caught up to the leader. Germany lags the United States in some industries, like electronics, but has the advantage of worker training programs. US and German productivity slowed with the decline in global innovation. Japan lags behind US service sector productivity. Its manufacturing industries set the productivity frontier in the 1990s but have since fallen behind. Japan has low productivity small firms and lacks effective competition. Classification-JEL: O47, J24 Keywords: productivity comparisons Journal: International Productivity Monitor Pages: 81-103 Volume: 38 Year: 2020 Month: Spring File-URL: http://www.csls.ca/ipm/38/Baily_Bosworth_Doshi.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:38:y:2020:4 Template-Type: ReDIF-Article 1.0 Author-Name: John Fernald Author-Email: john.fernald@insead.edu Author-Name: Robert Inklaar Author-Email: r.c.inklaar@rug.nl Title: Does Disappointing European Productivity Growth Reflect a Slowing Trend? Weighing the Evidence and Assessing the Future Abstract: In the years since the Great Recession, many observers have highlighted the slow pace of labor and total factor productivity (TFP) growth in advanced economies. This paper focuses on the European experience, where we highlight that trend TFP growth was already low in the runup to the Global Financial Crisis (GFC). This suggests that it is important to consider factors other than just the deep crisis itself or policy changes since the crisis. After the mid-1990s, European economies stopped converging, or even began diverging, from the U.S. level of TFP. That said, in contrast to the United States, there is some macroeconomic evidence for some northern European countries that the GFC had a further adverse impact on TFP growth. Still, the challenges for economic policy look surprisingly similar to the ones discussed prior to the Great Recession, even if the policy implications seem less clear. Classification-JEL: O47 Keywords: Productivity Growth, Trends, Forecasting, Europe Journal: International Productivity Monitor Pages: 104-135 Volume: 38 Year: 2020 Month: Spring File-URL: http://www.csls.ca/ipm/38/Fernald.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:38:y:2020:5 Template-Type: ReDIF-Article 1.0 Author-Name: Don Drummond Author-Email: drummond@queensu.ca Title: The World Bank Perspective on Productivity: A Review Article on "Productivity Revisited: Shifting Paradigms in Analysis and Policy" Abstract: In 'Productivity Revisited', the World Bank turns its ongoing productivity research program to the issue of the apparent failure of productivity in developing countries to converge to the higher productivity in advanced economies. The World Bank asserts, but provides little evidence, that converge is not taking place The analysis is grounded in the so-called second wave of productivity research which uses firm-level data to disaggregate productivity into gains within firms, across firms through research allocation and through market entry and exit. The disaggregations are found to differ across countries, suggesting convergence policies may need to be shaped to local circumstances rather than generalized across developing countries. A common question arising throughout is why firms, sectors and economies do not do more to emulate the behaviours of the more productive counterparts in advanced economies. Considerable emphasis is placed on managers and entrepreneurs in developing countries not having the right skill set as they have inadequate education and are risk averse. Despite claims that second-wave analysis puts into question traditional policy prescriptions, the World Bank advocates a traditional set of policy recommendations involving creating favourable business conditions, reducing distortions and improving human capital. Classification-JEL: J18, O47 Keywords: Review, World Bank, Policy Journal: International Productivity Monitor Pages: 136-144 Volume: 38 Year: 2020 Month: Spring File-URL: http://www.csls.ca/ipm/38/Drummond.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:38:y:2020:6 Template-Type: ReDIF-Article 1.0 Author-Name: Mary O'Mahony Author-Email: mary.omahony@kcl.ac.uk Title: Measuring Performance and Accountability in Higher Education: A Review Article on "Productivity in Higher Education" Abstract: Credible and robust measurement of productivity in higher education institutions are needed to assess the accountability of the sector. This review article discusses the NBER volume "Productivity in Higher Education". The volume contains articles estimating various facets of productivity in higher education including undergraduate outcomes from university, community college and online higher education, as well as the quality of teaching. The volume is an excellent example of combining economic reasoning with innovative data and clever analysis to yield credible conclusions. It contains important messages for the policy debate on scrutiny and accountability of Higher Education provision. Classification-JEL: I25, I28, O11, O41 Keywords: Education, Productivity, Review Journal: International Productivity Monitor Pages: 145-154 Volume: 38 Year: 2020 Month: Spring File-URL: http://www.csls.ca/ipm/38/O'Mahony.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:38:y:2020:7 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Title: Editor’s Overview Abstract: The 39th issue of the International Productivity Monitor contains six articles. Topics covered are The Productivity Institute recently established in the UK, the short-term productivity effects of the pandemic in Canada, productivity performance in G7 countries since the financial crisis, manufacturing productivity in the Nordic countries, and review articles on volumes on economic and productivity growth and the economics of artificial intelligence. Classification-JEL: O4 Keywords: Productivity, Innovation, Economic growth, Firm-level analysis Journal: International Productivity Monitor Pages: 1-2 Volume: 39 Year: 2020 Month: Fall File-URL: http://www.csls.ca/ipm/39/EO.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:39:y:2020:0 Template-Type: ReDIF-Article 1.0 Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk Author-Name: Anthony J. Venables Author-Email: tony.venables@economics.ox.ac.uk Title: A Concerted Effort to Tackle the UK Productivity Puzzle Abstract:The United Kingdom has suffered an extreme version of the "productivity puzzle" – the strong and largely unexplained slowdown in productivity growth among OECD economies since the mid-2000s. In recognition of the challenges that weak productivity growth and low levels of productivity create for economic performance, living standards, and distribution of income across regions, a new research institute has been set up to advance the understanding of the problem. The Productivity Institute will create a comprehensive and interdisciplinary research agenda and contribute to the frontier of knowledge creation in productivity research in the UK and around the world. The Institute will focus on innovative ways to improve productivity performance, providing new insights to help policy and business leaders understand better how to raise productivity and thereby raise living standards in a sustainable manner. This article outlines the overall approach to research, engagement and capacity building by the Institute. Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 3-15 Volume: 39 Year: 2020 Month: Fall File-URL: http://www.csls.ca/ipm/39/van_Ark-Venables.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:39:y:2020:1 Template-Type: ReDIF-Article 1.0 Author-Name: Joel Blit Author-Email: joel.blit@uwaterloo.ca Author-Name: Mikal Skuterud Author-Email: skuterud@uwaterloo.ca Author-Name: Michael R. Veall Author-Email: veall@mcmaster.ca Title: The Pandemic and Short-Run Changes in Output, Hours Worked and Labour Productivity: Canadian Evidence by Industry Abstract:The official measure of Canadian labour productivity rose by about 15 per cent (not annualized) during the first two quarters of 2020, reflecting a decline in total hours worked that exceeded an exceptional decline in output. We analyze this short-run change using monthly data disaggregated to 87 industries, focusing for analytical reasons on changes from April 2018 to April 2020 and August 2018 to August 2020. Just over one-fifth of the April labour productivity increase, and just under three-fifths of the smaller August increase, can be associated with the changing hours composition across industries. Estimated indices for the feasibility of working from home, the degree of worker health (COVID) risk, and the extent workers in the industry are customer-facing are not associated with the short-run changes in labour productivity by industry. However, there is clear evidence that industries with high work from home index values tended to have smaller reductions in output and hours. Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 16-32 Volume: 39 Year: 2020 Month: Fall File-URL: http://www.csls.ca/ipm/39/Blit-Skuterud-Veall.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:39:y:2020:2 Template-Type: ReDIF-Article 1.0 Author-Name: Jianmin Tang Author-Email: jianmin.tang@canada.ca Author-Name: Weimin Wang Author-Email: weimin.wang@canada.ca Title: Industry Productivity Performance in G7 Countries after the Global Financial Crisis: A Canadian Perspective Abstract: Compared to other G7 countries, Canada performed relatively well after the global financial crisis in both aggregate labour productivity and multifactor productivity (MFP) growth, which is in sharp contrast to its relatively weak performance in the 2000s. The objective of this article is to analyse the sources of Canada’s superior performance by comparing it to other G7 countries. In particular, the article examines industry productivity performance, estimates the contribution of individual industries to both aggregate labour productivity and MFP growth, and highlights the differences between Canada and other G7 countries before and after 2010. To this end, this article develops a methodology to more precisely identify the underlying forces at the industry level that have either propelled or hindered productivity growth, and thereby identify which industries have been at the heart of the changes in productivity performance. Classification-JEL: O47, F0 Keywords: G7 Countries, productivity, MFP Journal: International Productivity Monitor Pages: 33-52 Volume: 39 Year: 2020 Month: Fall File-URL: http://www.csls.ca/ipm/39/Tang-Wang.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:39:y:2020:3 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Lind Author-Email: daniel.lind@akavia.se Title: A Vertically Integrated Perspective on Nordic Manufacturing Productivity Abstract: Specialization, at the national and global level, and a growing importance of knowledge-based capital in current growth processes have led to a renewed interest in a vertically integrated perspective on productivity. This means that the focus is on all steps of the production process, regardless of in what sector or country the value creation takes place. From this perspective, Norway has improved its relative productivity since 2000 and is now the leader among the Nordic countries. Finland – and Sweden to some extent – have performed relatively poorly. Using import multipliers and splitting the domestic production chain into two productivity measures, this article shows that the vertically integrated perspective can contribute to new insights about productivity developments in trade-dependent and highly specialized countries. Important aspects of a policy for an enhanced vertically-integrated productivity are the quality of human capital, enhanced diffusion of knowledge and innovations and a holistic view of economic growth. Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 53-73 Volume: 39 Year: 2020 Month: Fall File-URL: http://www.csls.ca/ipm/39/Lind.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:39:y:2020:4 Template-Type: ReDIF-Article 1.0 Author-Name: Gilbert Cette Author-Email: gilbert.cette@banque-france.fr Title: What Do We Know About Economic and Productivity Growth? A Review Article on "Measuring Economic Growth and Productivity: Foundations, KLEMS Production Models, and Extensions" Abstract: "Measuring Economic Growth and Productivity" is not only a book on an essential topic, namely that of ``growth and productivity'', it is also a fabulous ensemble, bringing together contributions from many top specialists. But, in addition, it is a tribute to Dale W. Jorgenson, who has for decades been an exceptional contributor to gaining a better knowledge of the mechanisms of growth and productivity. The volume is dedicated to him. I was present in January 2020 at the annual IPM dinner at the AEA conference, when a preprint of the book was presented to him by the editor, Barbara Fraumeni. I openly admit that it was a very emotional moment. Classification-JEL: Keywords: Journal: International Productivity Monitor Pages: 74-80 Volume: 39 Year: 2020 Month: Fall File-URL: http://www.csls.ca/ipm/39/Cette.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:39:y:2020:5 Template-Type: ReDIF-Article 1.0 Author-Name: Eric Santor Author-Email: esantor@bank-banque-canada.ca Title: The Impact of Digitalization on the Economy: A Review Article on the NBER Volume "Economics of Artificial Intelligence: An Agenda" Abstract: Digitalization is affecting every aspect of our economy and our society. A set of new technologies are behind this latest surge - robotic process automation, artificial intelligence (AI) and machine learning (ML), big data, cloud computing, the internet of things and blockchain. This volume, \textit{The Economics of Artificial Intelligence}, focuses on the impact, real and prospective, of machine learning (ML), on the economy. The authors tackle a wide range of topics, including how it is impacting innovation, the consequences for employment and economic growth, issues related to privacy, international trade and ultimately, how AI will affect the economics discipline itself. The contributors, overall, take a positive view of the impact of AI on economic outcomes. They also acknowledge, however, that policies related to redistribution, privacy and competition are needed to ensure that the benefits of digitalization are shared appropriately. Classification-JEL: O3 Keywords: Digitalization, artificial intelligence, economy Journal: International Productivity Monitor Pages: 81-90 Volume: 39 Year: 2020 Month: Fall File-URL: File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:39:y:2020:6 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk. Title: Editors’ Overview Abstract: The 40th issue of the International Productivity Monitor contains seven articles. Topics covered are pay and productivity trends in Canada; the benchmarking of the productivity performance of frontier firms in New Zealand; the cause of Japan’s economic slowdown; and the measurement of the volume of output and productivity in services industries in OECD countries. The issue also contains a viewpoint on why Canada needs an Equitable Growth Institute and review articles on books on efficiency and productivity issues in the UK and techniques for the measurement of productivity. Classification-JEL: Keywords: Productivity, economic slowdown, service industries Journal: International Productivity Monitor Pages: 1-2 Volume: 40 Year: 2021 Month: Spring File-URL: http://www.csls.ca/ipm/40/IPM_40_EditorsOverview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:40:y:2021:0 Template-Type: ReDIF-Article 1.0 Author-Name: David M. Williams Author-Email: david.williams@bcbc.com Title: Pay and Productivity in Canada: Growing Together, Only Slower than Ever Abstract: Pay and labour productivity growth in Canada are broadly aligned over the long run since 1961 and during the 2008-19 business cycle. The slowdown in Canada’s productivity growth rate since 2000, the general stability of the labour share, and the lack of further gains in labour’s terms of trade after 2008 largely explain the slowdown in workers’ real pay growth over the 2008-19 business cycle. Canadians should be concerned about the country’s persistently low productivity growth because it leads to low real pay growth. Canada’s policymaking institutions should prioritize understanding and accelerating productivity Classification-JEL: Keywords: labour productivity, pay Journal: International Productivity Monitor Pages: 3-26 Volume: 40 Year: 2021 Month: Spring File-URL: http://www.csls.ca/ipm/40/IPM_40_Williams.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:40:y:2021:1 Template-Type: ReDIF-Article 1.0 Author-Name: Guanyu Zheng Author-Email: Guanyu.Zheng@rbnz.govt.nz Author-Name: Hoang Minh Duy Author-Email: bizhmd@nus.edu.sg Author-Name: Gail Pacheco Author-Email: : gail.pacheco@aut.ac.nz Title: Benchmarking the Productivity Performance of New Zealand’s Frontier Firms Abstract: This study compares the relative performance of New Zealand’s firms to several small advanced economies using novel cross-country microdata from CompNet. We present stylised facts for New Zealand relative to Belgium, Denmark, Finland, Netherlands and Sweden based on average productivity levels, as well as benchmarking laggard, median and frontier firms. This research also employs an analytical framework of technology diffusion to evaluate the extent of productivity convergence, and the impact of the productivity frontier on non-frontier firm performance. Results show that New Zealand’s firms have comparatively low productivity levels and that its frontier firms are not benefiting from the diffusion of best technologies outside the nation. Furthermore, there is evidence of labour misallocation in New Zealand based on less labour-productive firms having disproportionally larger employment shares than their more productive counterparts. Classification-JEL: Keywords: compnet, small advanced economies, firms Journal: International Productivity Monitor Pages: 27-55 Volume: 40 Year: 2021 Month: Spring File-URL: http://www.csls.ca/ipm/40/IPM_40_Zheng.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:40:y:2021:2 Template-Type: ReDIF-Article 1.0 Author-Name: Kyoji Fukao Author-Email: k.fukao@r.hit-u.ac.jp Author-Name: YoungGak Kim Author-Email: ykim@isc.senshu-u.ac.jp Author-Name: HyeogUg Kwon Author-Email: : kwon.hyeogug@nihon-u.ac.jp Title: The Causes of Japan’s Economic Slowdown: An Analysis Based on the Japan Industrial Productivity Database Abstract: Using the Japan Industrial Productivity Database (JIP) and the EU KLEMS database 2017, we compare the sources of economic growth of Japan, the United States, Germany, France, and the U.K. for the period 1995–2015 using growth accounting. We find that the reasons why Japan’s economic growth during the 2005–2015 period was much slower than that of the other major economies are the decline in the working-age population and sluggish investment in capital services. Among the five countries, Japan was the only one whose growth rate of the capital stock was lower than the steady state growth rate. Another reason for the slowdown in Japan’s economic growth in 2005–2015 was the decline in TFP growth, which was caused by a drop in productivity growth in a small number of industries, including electronic data processing machines, electricity, and wholesale trade. Classification-JEL: Keywords: compnet, economic slowdown, japan, productivity Journal: International Productivity Monitor Pages: 56-88 Volume: 40 Year: 2021 Month: Spring File-URL: http://www.csls.ca/ipm/40/IPM_40_Fukao.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:40:y:2021:3 Template-Type: ReDIF-Article 1.0 Author-Name: Mary O’Mahony Author-Email: mary.omahony@kcl.ac.uk Author-Name: Lea Samek Author-Email: lea.samek@oecd.org Title: Measuring the Volume of Services Industries Output and Productivity: An Audit of Services Producer Price Indices in OECD Countries Abstract: This article discusses measurement of Services Producer Price Indices, which are important in estimating the volume of the output of services sectors. Price indices for 31 individual services activities were downloaded from the websites of National Statistical Offices for 16 OECD countries and compared to those for the UK. The results show that UK services prices tend on average to have either lower or equal price growth than in other countries, suggesting that an underestimate of services output growth is not likely to be a greater problem in the UK than in other comparable countries. Nevertheless, there may be common biases across countries due to inadequate adjustments for quality. Further analysis of measurement methods suggests a small but significant positive bias in price inflation for one commonly employed method based on time spent on the provision of services. This means that the growth in the volume of services activity may be understated in general in the group of countries considered in this article. Classification-JEL: Keywords: UK, SPPIs, oecd Journal: International Productivity Monitor Pages: 89-104 Volume: 40 Year: 2021 Month: Spring File-URL: http://www.csls.ca/ipm/40/IPM_40_OMahony.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:40:y:2021:4 Template-Type: ReDIF-Article 1.0 Author-Name: Don Drummond Author-Email: ddrummond@queensu.ca Title: ViewPoint: Canada Should Establish an Equitable Growth Institute Abstract: Canada faces serious economic challenges and needs strategic policy advice to succeed. Productivity growth must rise from the mediocre trend of recent decades. The spoils of growth should be more evenly distributed. As a carbon-intensive economy, the adjustment to net zero emissions will require fundamental change. The Government of Canada has benefited from advice from occasional advisory groups, but it has been decades since there has been a comprehensive, multi-year policy research effort. The time has come to establish an Equitable Growth Institute. It should align with the objectives of the Government but have sufficient independence to tackle tough issues. Provinces and territories must be involved as they hold many of the policy levers. In addition to having its own governance structure and researchers, it should bring together and where appropriate create networks of researchers. The Institute should delve into big questions of the day, including whether and how a Quality of Life framework can inform decision-making and whether there are tradeoffs or complementarity between economic growth and equity and sustainability objectives. Classification-JEL: Keywords: canada, policy, equitable growth Journal: International Productivity Monitor Pages: 105-117 Volume: 40 Year: 2021 Month: Spring File-URL: http://www.csls.ca/ipm/40/IPM_40_Drummond.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:40:y:2021:5 Template-Type: ReDIF-Article 1.0 Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk Title: Putting Together the Pieces of the Productivity Puzzle: Review Article of Productivity Perspectives and Productivity and the Pandemic Abstract: The productivity puzzle in the UK may have taken a turn with the arrival of the COVID-19 crisis although we do not know at this point whether it will be for the better or the worse. The two edited volumes discussed in this review article are distinguished by the first being produced just before the pandemic, and the second in the midst of it. Together, the volumes address a broad range of economic, social and policy issues related to the productivity puzzle in the UK, with a strong focus on organizations, management, entrepreneurship, innovation and skills. In addition to examining productivity growth at the firm level, the volumes also analyze differences in productivity and income between firms, workers and regions. There is also a strong plea for a system-based approach to policy making for productivity. On the whole, the contributors take a cautious approach on how much the pandemic will change productivity performance in the medium-term, but they argue strongly in favour of active policy intervention to mitigate the damagea rising from the pandemic and create better conditions for a sustained productivity revival. Classification-JEL: Keywords: review, productivity, uk, covid-19 Journal: International Productivity Monitor Pages: 118-133 Volume: 40 Year: 2021 Month: Spring File-URL: http://www.csls.ca/ipm/40/IPM_40_vanArk.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:40:y:2021:6 Template-Type: ReDIF-Article 1.0 Author-Name: Bert M. Balk Author-Email: bert.m.balk@outlook.com Title: Productivity Measurement with Data Envelopment Analysis and Stochastic Frontier Analysis: A Review Article on Measurement of Productivity and Efficiency: Theory and Practice Classification-JEL: Keywords: DEA, productivity, review, SFA Journal: International Productivity Monitor Pages: 134-139 Volume: 40 Year: 2021 Month: Spring File-URL: http://www.csls.ca/ipm/40/IPM_40_Balk.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:40:y:2021:7 Template-Type: ReDIF-Article 1.0 Author-Name: Bert M. Balk Author-Email: bert.m.balk@outlook.com Title: Productivity Measurement with Data Envelopment Analysis and Stochastic Frontier Analysis: A Review Article on Measurement of Productivity and Efficiency: Theory and Practice Classification-JEL: Keywords: DEA, productivity, review, SFA Journal: International Productivity Monitor Pages: 134-139 Volume: 40 Year: 2021 Month: Spring File-URL: http://www.csls.ca/ipm/40/IPM_40_Balk.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:40:y:2021:7 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk. Title: Editors’ Overview Abstract: We are pleased to feature in the 41st issue the International Productivity Monitor a symposium on the relationship between productivity and pay, an important topic the journal has addressed on many previous occasions. The contributions in this symposium provide up-to-date estimates on this relationship for the United States, the United Kingdom and Canada. In addition, they offer new and original interpretations of what is driving the gap between productivity and pay, and the different ways it has manifested itself across those three economies. Classification-JEL: Keywords: Productivity, pay Journal: International Productivity Monitor Pages: 1-2 Volume: 41 Year: 2021 Month: Fall File-URL: http://www.csls.ca/ipm/41/IPM_41_EditorsOverview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:41:y:2021:0 Template-Type: ReDIF-Article 1.0 Author-Name: Jacob Greenspon Author-Email: jgreenspon@hks.harvard.edu Author-Name: Anna Stansbury Author-Email: amms@mit.edu. Author-Name: Lawrence H. Summers Author-Email: lawrence_summers@harvard.edu Title: Productivity and Pay in the United States and Canada Abstract: We study the productivity-pay relationship in the United States and Canada along two dimensions. The first is divergence: the degree to which productivity has grown faster than pay. The second is delinkage: the degree to which incremental increases in the rate of productivity growth translate into incremental increases in the rate of growth of pay, holding all else equal. In both countries there has been divergence: the pay of typical workers has grown substantially more slowly than average labour productivity over recent decades, driven by both rising labour income inequality and a declining labour share of income. Even as the levels of productivity and pay have grown further apart, however, we find evidence for a substantial degree of linkage between productivity growth and pay growth: in both countries, periods with faster productivity growth rates have been periods with faster rates of growth of the pay of average and typical workers, holding all else equal. This linkage appears somewhat stronger in the US than in Canada. Overall, our findings lead us to tentatively conclude that policies or trends which lead to incremental increases in productivity growth, particularly in large relatively closed economies like the USA, will tend to raise middle class incomes. At the same time, other factors orthogonal (i.e. statistically independent) to productivity growth have been driving productivity and typical pay further apart, emphasizing that much of the evolution in middle class living standards will depend on measures bearing on relative incomes. Classification-JEL: Keywords: Productivity, pay, productivity growth, pay growth Journal: International Productivity Monitor Pages: 3-30 Volume: 41 Year: 2021 Month: Fall File-URL: http://www.csls.ca/ipm/41/IPM_41_Greenspon.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:41:y:2021:1 Template-Type: ReDIF-Article 1.0 Author-Name: Andreas Teichgraber Author-Email: a.o.teichgraeber@lse.ac.uk Author-Name: John Van Reenen Author-Email: j.vanreenen@lse.ac.uk Title: Have Productivity and Pay Decoupled in the UK? Abstract: In the long-run at the macro level, the growth in real pay of workers tends to follow that of labour productivity. In recent years, however, there have been concerns that this relationship has broken down and that pay has become “decoupled” from productivity, growing much more slowly, and leading to a fall in the labour share. This has been a welldocumented phenomenon in the United States (US) since the early 1980s. By contrast, we show that in the United Kingdom (UK), employee mean hourly compensation has grown at the same rate as labour productivity between 1981 and 2019. However, there has been a divergence between median employee hourly wage growth and productivity growth of about 25 percentage points. About three-fifths of this “overall decoupling” is due to increasing inequality (mean wages growing faster than median wages) and one-third is due to the increased non-wage compensation costs, in particular employer pension contributions. However, this analysis relates to employee compensation. The average self-employed worker has seen their income grow by only 50 per cent, compared to 80 per cent for the average employee. Using micro-data, we show that this gap can essentially be explained by (i) the growth in the numbers of “solo self- employed” (who have relatively low incomes), and (ii) a much greater fall in hours worked by the self-employed than for the employed. Finally, if we “correct” the labour share for self- employment and non-wage labour costs, the UK labour share has fallen by about 3.5 percentage points over the last four decades. Classification-JEL: Keywords: labour productivity, pay, inequality, self-employment Journal: International Productivity Monitor Pages: 31-60 Volume: 41 Year: 2021 Month: Fall File-URL: http://www.csls.ca/ipm/41/IPM_41_Teichgraber.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:41:y:2021:2 Template-Type: ReDIF-Article 1.0 Author-Name: Lawrence Mishel Author-Email: lmishel@epi.org Author-Name: Josh Bivens Author-Email: jbivens@epi.org Title: The Productivity-Median Compensation Gap in the United States: The Contribution of Increased Wage Inequality and the Role of Policy Choices Abstract: This article offers a narrative and supporting evidence on mechanisms that suppressed wage growth and generated a divergence of 43 percentage points (1.05 points per year) between net productivity and median hourly compensation growth between 1979 and 2017 in the United States. These dynamics reflect the strengthening of employers’ power relative to white-collar and blue-collar workers. We offer empirical assessments of the impact of particular factors on wage growth and wage inequality. The three factors with the largest and best measurement impacts, i.e., excessive unemployment, eroded collective bargaining, and corporate-driven globalization — explain 55 per cent of the divergence. Other factors — a diminished overtime salary threshold, employee misclassification, employer-imposed noncompete agreements, and corporate fissuring-subcontracting and major-buyer dominance — explain another 20 per cent. Together, these policy-related factors can account for threefourths of the 1979-2017 divergence between productivity and median hourly compensation growth. Classification-JEL: Keywords: wage inequality, wage growth, productivity, compensation Journal: International Productivity Monitor Pages: 61-97 Volume: 41 Year: 2021 Month: Fall File-URL: http://www.csls.ca/ipm/41/IPM_41_Mishel.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:41:y:2021:3 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: James Ashwell Title:The Evolution of the Productivity-Median Wage Gap in Canada, 1976-2019 Abstract: The median wage is a key metric to assess developments in the standard of living of the population. Productivity gains are passed on to workers as real wage gains. But in recent decades the proportion of labour productivity gains that are being passed on to the typical or median worker has fallen in many advanced countries, a process known as decoupling. The article uses an accounting framework developed by the Centre for the Study of Living Standards to quantify the importance of the factors affecting the relationship between productivity and real median wages. It presents results for the 1976-2019 period in Canada. A key finding is that the annual gap between labour productivity growth and real hourly median wage growth fell from 1.36 percentage points per year in 1976-2000 to 0.46 points in 2000-2019. This was due to slower growth in wage inequality, the end of the decline of the labour share and an improvement in workers terms of trade. Productivity growth was relatively stable between periods. In the 1976-2000 period, the bargaining power of workers fell dramatically due to high unemployment, falling unionization rates and a rising import share. After 2000, these trends reversed or stabilized, improving the bargaining power of workers. Classification-JEL: Keywords: productivity, wage Journal: International Productivity Monitor Pages: 98-117 Volume: 41 Year: 2021 Month: Fall File-URL: http://www.csls.ca/ipm/41/IPM_41_Sharpe.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:41:y:2021:4 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Inklaar Author-Email: r.c.inklaar@rug.nl Author-Name: Pieter Woltjer Author-Email: p.j.woltjer@gmail.com Title: Is Egypt Really More Productive than the United States? The Data behind the Penn World Table Abstract: A new feature in recent versions of the Penn World Table (PWT) is data on comparative levels of total factor productivity (TFP) across countries. TFP is defined as the efficiency with which inputs are transformed into outputs, and differences across countries can be due to factors such as better technology or better resource allocation. Yet, surprisingly, in PWT version 10.0, a number of low-income countries have a TFP level well above that of the United States. In this article we discuss the case of Egypt in 2017. PWT then reports a productivity level that is 23 per cent higher than that of the United States despite having an income level of only one fifth of the US level. We trace this anomalous outcome to the underlying data on comparative inputs. A fully satisfactory answer to the question in the title is elusive at this point, but the analysis highlights the data challenges that affect TFP level estimates, alongside more familiar modeling and measurement challenges. Classification-JEL: Keywords: TFP, productivity Journal: International Productivity Monitor Pages: 118-137 Volume: 41 Year: 2021 Month: Fall File-URL: http://www.csls.ca/ipm/41/IPM_41_Inklaar.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:41:y:2021:5 Template-Type: ReDIF-Article 1.0 Author-Name: Cindy Cunningham Author-Name: Sabrina Wulff Pabilonia Author-Email: Pabilonia.Sabrina@bls.gov. Author-Name: Jay Stewart Author-Name: Lucia Foster Author-Name: Cheryl Grim Author-Name: John Haltiwanger Author-Name: Zoltan Wolf Title: Chaos Before Order: Productivity Patterns in U.S. Manufacturing Abstract: Within-industry productivity dispersion is pervasive and exhibits substantial variation across countries, industries, and time. We build on prior research that explores the hypothesis that periods of innovation are initially associated with a surge in business start-ups, followed by increased experimentation that leads to rising dispersion potentially with declining aggregate productivity growth, and then a shakeout process that results in higher productivity growth and declining productivity dispersion. Using novel detailed industrylevel data on total factor productivity and labour productivity dispersion from the Dispersion Statistics on Productivity dataset along with novel measures of entry rates from the Business Dynamics Statistics and productivity growth data from the Bureau of Labor Statistics for U.S. manufacturing industries, we find support for this hypothesis, especially for the high-tech industries. An increase in entry rates in a two-year period t is associated with an increase in dispersion and decrease in aggregate productivity growth in two-year period t+1 and a decrease in dispersion and increase in aggregate productivity growth in two-year period t+2. Classification-JEL: Keywords: aggregate productivity growth, productivity, dispersion, manufacturing Journal: International Productivity Monitor Pages: 138-152 Volume: 41 Year: 2021 Month: Fall File-URL: http://www.csls.ca/ipm/41/IPM_41_Cunningham.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:41:y:2021:6 Template-Type: ReDIF-Article 1.0 Author-Name: Robin C. Sickles Author-Email: rsickles@rice.edu Author-Name: Valentin Zelenyuk Author-Email: v.zelenyuk@uq.edu.au. Title: Response to Review Article by Bert Balk on Measurement of Productivity and Efficiency: Theory and Practice Classification-JEL: Keywords: productivity, efficiency Journal: International Productivity Monitor Pages: 153-156 Volume: 41 Year: 2021 Month: Fall File-URL: http://www.csls.ca/ipm/41/IPM_41_Sickles.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:41:y:2021:7 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk. Title: Editors’ Overview Abstract: This edition of the International Productivity Monitor, No. 42, is a particularly large one (211 pages) as it not only includes four substantive articles as part of our regular line up, but also four articles which represent the first part of our Symposium on Productivity and Well-Being. In this overview we will discuss the other four articles. A separate introduction to the Symposium follows after the first four articles in this volume. Classification-JEL: Keywords: Productivity, Well-Being Journal: International Productivity Monitor Pages: 1-2 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_EditorsOverview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:0 Template-Type: ReDIF-Article 1.0 Author-Name: Tero Kuusi Author-Email: tero.kuusi@etla.fi Author-Name: Martti Kulvik Author-Email: martti.kulvik@etla.fi Author-Name: Juha-Matti Junnonen Author-Email: juha-matti.junnonen@tuni.fi Title: Productivity Growth in Construction Value Chains Abstract: The construction industry has suffered from low productivity growth in recent decades. Motivated by the economic importance of the industry, we revisit the construction productivity puzzle by analyzing the construction value chains of 12 European countries using data from the World Input–Output, the EU KLEMS databases and complementary datasets. We decompose construction-related value added and productivity contributions to both the construction industry and the rest of the value chain and show that the traditional focus on the construction industry is adversely restrictive for understanding productivity growth in construction activities. There is a substantial contribution of construction-related value added generated in other industries, and the productivity growth in the value chains has, for the most part, been seen outside the construction industry. Furthermore, we show that there is a strong, long-term relationship between construction-related patents and the improvement of total factor productivity in the value chains, but the chains typically do suffer from low efficiency in the use of information technology. Classification-JEL: Keywords: Productivity, Construction Journal: International Productivity Monitor Pages: 3-32 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_Kuusi.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:1 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Lind Author-Email: daniel.lind@arenagruppen.se Title: The China Effect on Manufacturing Productivity in the United States and Other High-income Countries Abstract: From a macroeconomic perspective and using input-output techniques, this article investigates to what extent, and how, the growing use of Chinese intermediates has contributed to the labour productivity growth within the manufacturing production processes of 22 high-income countries. The main result — based on almost 400 global value chains during the period 2000-2014 — is that this productivity effect is significant and economically relevant. This is also the case for the United States. The effect holds before and after the financial crisis, is robust to different specifications, and is identified in almost all production processes. Three mechanisms behind the identified pattern are — tentatively — identified: reduced employment, reduced prices, and productivity enhancing functional specialization. However, China is not special: the absolute productivity effect of the growing use of Eastern European intermediates seems to be even larger. Finally, China and Eastern Europe are special in relation to the high-income countries: growing intra-trade of intermediates among the high-income countries is associated with weaker productivity growth. Classification-JEL: Keywords: Productivity, China, Manufacturing Journal: International Productivity Monitor Pages: 33-62 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_Lind.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:2 Template-Type: ReDIF-Article 1.0 Author-Name: Ulrich Kohli Author-Email: Ulrich.Kohli@unige.ch Title: Trading Gains and Productivity: A Törnqvist Approach Abstract: This article looks at alternative Törnqvist measures of a country’s trading-gain and terms-of-trade effects, as they have been proposed in the literature starting with the seminal work of Diewert and Morrison (1986), and their link to standard measures of productivity. It strongly argues in favour of using the price of domestic final demand as a deflator when computing real Gross Domestic Income (GDI), and, by the same token, the trading gains and labour productivity measures. It shows that the trading gains then generally consist of two parts, a pure terms-of-trade component and an additional relative-price component, the latter of which can be interpreted as a real-exchange-rate effect. National and international statistical agencies, with the notable exceptions of Statistics Canada and the U.S. Bureau of Economic Analysis, tend to report incomplete trading-gain statistics in that they omit the second component. Consequently the real GDI estimates they publish must be viewed as flawed. Taking trading-gains into account has no direct effect on the measurement of total factor productivity, but it does affect the measures of average and marginal labour productivity when related to real GDI and its deflator. Numerical estimates for Switzerland are reported as an illustration. Classification-JEL: Keywords: Productivity, Trading Gains, Tornqvist Journal: International Productivity Monitor Pages: 63-86 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_Kohli.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:3 Template-Type: ReDIF-Article 1.0 Author-Name: Jay Stewart Author-Email: stewart.jay@bls.gov Title: Why Was US Labour Productivity Growth So High During the COVID-19 Pandemic? The Role of Labour Composition Abstract: In the first few weeks of the COVID-19 recession, around 20 million US workers lost their jobs, with half of those losses occurring in the last two weeks of March 2020. On the tail of these unprecedented job losses, labour productivity grew at an annualized rate of 10.3 per cent in 2020Q2 and the average hourly wage increased sharply. This study examines how these phenomena are related. Because most of the job losses were in lowwage industries or among low-wage workers in high wage industries, the average skill level of the labour force increased substantially. This study finds that this increase in average skill level accounted for 71 per cent (7.3 percentage points) of labour productivity growth in 2020Q2, and that about one-third of the increase in average skill level was due to the change in the distribution of workers across major industries, mainly because of the massive job losses in leisure and hospitality and other low-wage industries. Altogether, changes in the distribution of workers across major industries accounted for 24 per cent (2.5 percentage points) of the 10.3 per cent increase in labour productivity. Classification-JEL: Keywords: Productivity, Covid-19, Labour Composition, Productivity Growth Journal: International Productivity Monitor Pages: 87-103 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_Stewart.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:4 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Dan Sichel Author-Email: dsichel@wellesley.edu Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk. Title: Introduction to the Symposium on Productivity and Well-being, Part I Abstract: Articles published in the International Productivity Monitor have traditionally focused on the production sphere of economic activity and have seldom addressed the relationship between productivity and well-being. Recognizing the increasing attention to well-being issues by economists, government and the general public, this issue of the IPM goes some way to remedy this past lack of attention to well-being by publishing a first symposium of four articles on productivity-well-being linkages. A second symposium of three articles on the same topic will appear in the next issue of the International Productivity Monitor. This introduction discusses the background and motivation of the symposium, the organizational process, highlights key issues related to productivity-well-being linkages, and provides a detailed synthesis of the contributions of the four articles. Classification-JEL: Keywords: Productivity, Well-Being Journal: International Productivity Monitor Pages: 104-116 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_SymposiumIntro.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:5 Template-Type: ReDIF-Article 1.0 Author-Name: Jaimie Legge Author-Email: Author-Name: Conal Smith Author-Email: conal.smith@vuw.ac.nz Title: Well-being and Productivity: A Capital Stocks Approach Abstract: In the widely used capital stocks approach to conceptualizing intergenerational wellbeing, the well-being of the current generation is considered a function of produced capital, human capital (labour), social capital, and natural capital. Most discussion of the sustainability of levels of well-being into the future is focused on considering whether the quantity of these capital stocks left for future generations will be the same, larger, or smaller than the quantity available to the current generation. However, the efficiency with which the capital stocks are used to produce well-being also matters. Because the capital stocks approach is grounded in a framework with strong parallels to that underpinning growth accounting, total factor productivity (TFP) provides a potentially useful way of examining this issue. This article explores the relationship between well-being and TFP. An econometric approach is used to develop methodologically comparable estimates of traditional TFP (where the output in question is national income) and total well-being productivity (where the output is mean national life satisfaction). The differences between the two measures are compared and the impact on this of confounding factors — including the roles of social capital, natural capital, and cultural bias in responses to subjective well-being measures — is explored. We find that there are large differences in total well-being productivity across countries. More generally, interpreting the capital stocks model in terms of an aggregate production function for well-being produces plausible results. Classification-JEL: Keywords: Productivity, Well-Being, Capital Stocks Journal: International Productivity Monitor Pages: 117-141 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_Smith.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:6 Template-Type: ReDIF-Article 1.0 Author-Name: Tim Hazledine Author-Email: t.hazledine@auckland.ac.nz Title: Trust, Deep Trust, Productivity and Well-being in 136 Countries Abstract: The article explores the role of generalized or social trust (trust between strangers) in explaining cross-country differences in the level of productivity (output per worker) and in self-reported well-being for 136 countries. Trust is measured directly from survey data. In addition, a second trust variable called deep trust is estimated as a function of ancient cultural, historical, geographic, and linguistic factors. Both trust variables have significant bivariate relationships with each of productivity and well-being, each of which can also be modelled with fairly standard specifications: an augmented production function for productivity, and the multi-variate model of well-being developed in the annual World Happiness Reports. Yet when either trust variable is added to each of the standard models, neither contributes any additional explanatory power. So where is the bivariate significance of trust coming from? We find that, in every case, one or both of trust and deep trust is significant for the standard determinants of productivity, with deep trust doing better at predicting human capital, physical capital and institution quality, and actual trust being stronger for the well-being determinants. That is, trust in the 21st century appears to not directly contribute to productivity or well-being, but has a substantial effect working through the proximate determinants. Classification-JEL: Keywords: Productivity, Trust, Deep Trust, Well-Being Journal: International Productivity Monitor Pages: 142-164 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_Hazledine.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:7 Template-Type: ReDIF-Article 1.0 Author-Name: Diane Coyle Author-Email: dc700@cam.ac.uk Author-Name: Leonard Nakamura Author-Email: leonard.nakamura@phil.frb.org Title: Time Use, Productivity, and Household-centric Measurement of Welfare in the Digital Economy Abstract: There is substantial interest in developing a broader understanding of economic progress than the standard indicator, real GDP, not least because digital technology is significantly changing both production within the GDP boundary and household activity outside the boundary. Market and household production and leisure now all involve substantial time online. This article describes a measurement framework that would encompass extended utility combining time allocation — over working for pay, producing at home, and leisure — with monetary measures of objective or subjective well-being during each activity and new ways of measuring productivity in digitalized activities. Implementation would require time use statistics in addition to well-being data and direct survey evidence on the shadow price of time. We advocate an experimental set of time and well-being accounts and discuss their data requirements. Classification-JEL: Keywords: Productivity, Time Use, Welfare Journal: International Productivity Monitor Pages: 165-186 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_Coyle.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:8 Template-Type: ReDIF-Article 1.0 Author-Name: Nicholas Oulton Author-Email: n.oulton@lse.ac.uk Title: The Link Between the Standard of Living and Labour Productivity in the UK: A Decomposition Abstract: According to Paul Krugman, “Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.” But productivity and the standard of living are different concepts and are measured in different ways, so the question is, what is the linkage between them? Productivity is typically measured by GDP per hour. The standard of living has potentially many aspects such as health, longevity, personal security, and relationships. But here I take a narrower view and stick to the national accounts. So the standard of living is measured by the household disposable income of the median individual. I use the median rather than the mean so that inequality is taken into account. I develop a decomposition of the growth of median household income which relates it to the growth of productivity via eight additional factors, one of which is inequality; four other factors are measures of labour market performance. I apply this decomposition to the UK over the period 1977 to 2019. I find that productivity growth was by far the most important factor in accounting for the growth of living standards which was substantial up to 2007; rising inequality prior to 2007 retarded the growth of living standards but not by much. Since 2007 productivity growth has collapsed as has also the growth of living standards. The fall in the latter has been mitigated somewhat by a fall in inequality. Classification-JEL: Keywords: Labour Productivity, Standard of Living, Decomposition Journal: International Productivity Monitor Pages: 187-211 Volume: 42 Year: 2022 Month: Spring File-URL: http://www.csls.ca/ipm/42/IPM_42_Oulton.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:42:y:2022:9 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk. Title: Editors’ Overview Abstract: The second issue of the International Productivity Monitor for 2022 (No. 43) includes the second part of our Symposium on Productivity and Well-Being (the first part was published in the Spring issue, No. 42). A separate introduction to the second part of the Symposium follows this overview. Below we discuss the other two articles in the issue. Classification-JEL: Keywords: Productivity, Well-Being Journal: International Productivity Monitor Pages: 1-2 Volume: 43 Year: 2022 Month: Fall File-URL: http://www.csls.ca/ipm/43/IPM_43_EditorsOverview.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:43:y:2022:0 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Dan Sichel Author-Email: dsichel@wellesley.edu Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk. Title: Introduction to the Symposium on Productivity and Well-being, Part II Abstract: Classification-JEL: Keywords: Productivity, Well-Being Journal: International Productivity Monitor Pages: 3-9 Volume: 43 Year: 2022 Month: Fall File-URL: http://www.csls.ca/ipm/43/IPM_43_Sympo.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:43:y:2022:1 Template-Type: ReDIF-Article 1.0 Author-Name: Francesco Sarracino Author-Email: Francesco.Sarracino@statec.etat.lu Author-Name: Kelsey J. OConnor Author-Email: kelsey.oconnor@statec.etat.lu Title: A Measure of Well-being Efficiency Based on the World Happiness Report Abstract: We estimate a measure of well-being efficiency that assesses countries’ ability to transform inputs into subjective well-being (Cantril ladder). We use the six inputs (real GDP per capita, healthy life expectancy, social support, freedom of choice, absence of corruption, and generosity) identified in the World Happiness Reports and apply Data Envelopment Analysis to a sample of 126 countries. Efficiency scores reveal that high ranking subjective well-being countries, such as the Nordic countries, are not strictly the most efficient ones. Also, the scores are uncorrelated with a traditional (total factor) measure of economic efficiency. This suggests that the implicit assumption that economic efficiency promotes wellbeing is not supported. Subjective well-being efficiency can be improved by changing the amount (scale) or composition of inputs and their use (technical efficiency). For instance, countries with lower unemployment, and greater healthy life expectancy and optimism are more efficient. Classification-JEL: Keywords: Productivity, Well-Being Journal: International Productivity Monitor Pages: 10-40 Volume: 43 Year: 2022 Month: Fall File-URL: http://www.csls.ca/ipm/43/IPM_43_OConnor.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:43:y:2022:3 Template-Type: ReDIF-Article 1.0 Author-Name: Chiara Peroni Author-Email: Chiara.Peroni@statec.etat.lu Author-Name: Maxime Pettinger Author-Email: Maxime.Pettinger@statec.etat.lu Author-Name: Francesco Sarracino Author-Email: Francesco.Sarracino@statec.etat.lu Title: Productivity Gains from Worker Well-Being in Europe Abstract: This article investigates the relationship between well-being in the workplace and labour productivity using a combined dataset covering the business economies of 30 European countries. The dataset combines information on working conditions and on the structure and performance of industries in manufacturing, construction and services. Data are sourced from representative surveys on individuals’ working conditions and official structural business statistics. Regressions of labour productivity on measures of worker wellbeing — job satisfaction and a multidimensional index of job quality — provide evidence that a link between the two variables operates at the aggregate level: industries where worker well-being is higher have higher levels of labour productivity. This result implies that well-being in the workplace is not just desirable in itself, but it also contributes to labour productivity. This is relevant to firms, managers, unions, and policy makers as policies that foster worker well-being consequently can contribute to productivity growth. Classification-JEL: Keywords: Productivity, Well-Being Journal: International Productivity Monitor Pages: 41-61 Volume: 43 Year: 2022 Month: Fall File-URL: http://www.csls.ca/ipm/43/IPM_43_Peroni.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:43:y:2022:4 Template-Type: ReDIF-Article 1.0 Author-Name: Charles-Henri DiMaria Author-Email: charles-henri.dimaria@statec.etat.lu Author-Name: Chiara Peroni Author-Email: Chiara.Peroni@statec.etat.lu Author-Name: Francesco Sarracino Author-Email: Francesco.Sarracino@statec.etat.lu Title: From Economic Productivity to Productive Well-Being: the Role of Life Satisfaction and Adjusted Net Savings Abstract: Productivity - a driver of economic growth - is not necessarily compatible with societal well-being, nor environmental sustainability. Various authors contributed frameworks to incorporate environmental issues in the measurement of productivity, or studied the role of subjective well-being for productivity. However, studies proposing ways to account for both subjective well-being and sustainability in productivity measurement are scarce. We examine whether and to what extent it is possible to include subjective well-being and sustainability measures among the inputs and/or outputs of a traditional productivity framework. Specifically, we adopt a data-driven approach to test whether subjective wellbeing and adjusted net savings meaningfully contribute to computing a productivity-like indicator. We apply Data Envelopment Analysis (DEA) to European data from 2005 to 2018. We find that including subjective well-being among the inputs and the outputs of production meaningfully contributes to the measurement of total factor productivity. Classification-JEL: Keywords: Productivity, Well-Being Journal: International Productivity Monitor Pages: 62-80 Volume: 43 Year: 2022 Month: Fall File-URL: http://www.csls.ca/ipm/43/IPM_43_DiMaria.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:43:y:2022:5 Template-Type: ReDIF-Article 1.0 Author-Name: John F. Helliwell Author-Email: john.helliwell@ubc.ca Title: Reflections on Measuring and Improving Productivity When Subjective Well-being Is the Objective Abstract: Classification-JEL: Keywords: Productivity, Well-Being Journal: International Productivity Monitor Pages: 81-85 Volume: 43 Year: 2022 Month: Fall File-URL: http://www.csls.ca/ipm/43/IPM_43_Helliwell.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:43:y:2022:6 Template-Type: ReDIF-Article 1.0 Author-Name: Weilin Liu Author-Email: liuwl@nankai.edu.cn Author-Name: Qian Cheng Author-Email: 2120193047@mail.nankai.edu.cn Author-Name: Robin C. Sickles Author-Email: rsickles@rice.edu Title: Productivity Growth and Spillovers across European and American Industries: A Global Value Perspective Based on EU KLEMS Abstract: The development of production networks has promoted knowledge flows and technology diffusion among industries over the past decades, which affects the productivity growth for countries within these networks. This article examines productivity growth in the presence of inter-sectoral linkages. We construct a spatial production model with technological spillovers and productivity growth heterogeneity at the industry-level. We use the global value chain (GVC) linkages from inter-country input-output tables to model the technological interdependence among industries, and estimate total factor productivity (TFP) growth and its spillover among European countries. We find that the spillover effects from intermediate inputs are significant. There is a network effect of TFP growth from one country to another through input-output linkages. We provide a better understanding of the impact of spillover effects on TFP growth in the context of GVCs. Classification-JEL: Keywords: Productivity,Spillover, Technology, Productivity Growth Journal: International Productivity Monitor Pages: 86-109 Volume: 43 Year: 2022 Month: Fall File-URL: http://www.csls.ca/ipm/43/IPM_43_Sickles.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:43:y:2022:7 Template-Type: ReDIF-Article 1.0 Author-Name: Weilin Liu Author-Email: liuwl@nankai.edu.cn Title: Did Trade Liberalization Boost Total Factor Productivity Growth in Manufacturing in India in the 1990s? Abstract: India undertook substantial trade reforms from 1991 onwards, accompanied by extensive industrial reforms. Several studies undertaken to date based on growth accounting have reported that total factor productivity (TFP) growth in Indian manufacturing in the initial seven to ten years of the post-reform period was lower than that in the decade before the reforms. This finding is in sharp conflict with the sizeable econometric literature that has unambiguously established a positive effect of trade reforms on productivity, backed by strong theoretical reasons to expect such an effect. This article asserts that certain corrections are required in the computation of TFP growth in Indian manufacturing for the 1980s and 1990s for making a valid comparison and presents the corrected TFP growth rates. Further, an argument is built theoretically with some preliminary empirical support that a downward estimation bias is likely to arise when the conventional growth-accounting approach to the measurement of TFP growth is applied to a situation when major trade reforms are underway, as was the case with Indian manufacturing in the 1990s. Based on the TFP growth estimates obtained, a supportive plant-level analysis of the impact of tariff reform on productivity of Indian manufacturing plants, and the identified possible downward bias in TFP estimation, it is argued that in all probability the productivity growth performance of Indian manufacturing was better in the 1990s following the reforms than the performance in the 1980s. Classification-JEL: Keywords: Productivity, Trade Liberalization, India Journal: International Productivity Monitor Pages: 110-139 Volume: 43 Year: 2022 Month: Fall File-URL: http://www.csls.ca/ipm/43/IPM_43_Goldar.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:43:y:2022:8 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk. Title: Editors’ Overview Abstract: The 44th issue of the International Productivity Monitor contains five articles: a review of the rise of pro-productivity institutions; a proposal for improved measures of output, input and productivity in the non-profit sector; a comparison of estimates of capital and total factor productivity growth across international databases; an analysis of productivity in West Asian Arab countries; and lessons from productivity research. Classification-JEL: Keywords: Productivity, Total Factor Productivity, Measurement, Non-Profit Journal: International Productivity Monitor Pages: 1-2 Volume: 44 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/44/IPM_44_Editors.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:44:y:2023:0 Template-Type: ReDIF-Article 1.0 Author-Name: Dirk Pilat Author-Email: dirk.pilat@manchester.ac.uk Title: The Rise of Pro-Productivity Institutions: A Review of Recent Developments Abstract: This article reviews the recent analytical work and policy recommendations of eleven national productivity commissions, i.e. Australia, Belgium, Denmark, Finland, France, Germany, Ireland, the Netherlands, New Zealand, Portugal, and the United Kingdom. It finds several differences between the commissions as regards institutional set-up, composition, and degree of independence, amongst others. The commissions have much more in common in their analytical and policy work. This likely reflects common challenges, such as the slowdown in productivity and the COVID-19 crisis, as well as structural trends such as digitalization. It also reflects a shared understanding of the main drivers of productivity, notably investment, human capital, innovation, digitalization and creative destruction, and the policies affecting those drivers. The article also finds some areas that have not yet received much attention from commissions, such as the link between the environment and productivity or the relationship between productivity, wages, and inequality. The rise of productivity commissions across the OECD area provides a rich source of analysis and policy learning that should be drawn on by academics, policy makers and others interested in productivity. Classification-JEL: Keywords: Productivity, Commissions, Institutions Journal: International Productivity Monitor Pages: 3-33 Volume: 44 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/44/IPM_44_Pilat.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:44:y:2023:1 Template-Type: ReDIF-Article 1.0 Author-Name: Josh Martin Author-Email: josh.martin@bankofengland.co.uk Author-Name: Jon Franklin Author-Email: Title: Fuller Measures of Output, Input and Productivity in the Non-Profit Sector: A Proof of Concept for the United Kingdom Abstract: We explore the appropriate conceptual framework for thinking about the output and productivity of the non-profit sector, and sketch a roadmap for measuring the productivity of this sector. Doing so requires us to go beyond the National Accounts, since some inputs to the non-profit sector (such as volunteer time) are outside the GDP boundary. Using a range of publicly available data we estimate new input and output measures for the Non-Profit Institutions Serving Households (NPISH) sector in the UK, and from these estimate labour productivity levels and growth. We find that the NPISH sector in the UK has grown rapidly over the past 20 years, with hours worked and nominal GVA growing faster than for the economy as a whole. Our fuller measures suggest NPISH accounts for about 4.4 percent of GDP in 2019, up from 3.3 percent two decades before, and compared with 2.9 per cent in 2019 before conceptual adjustments. The NPISH sector is less productive than the UK average, although similar to other labour-intensive industries like retail. We estimate little growth in labour productivity between 1997 and 2019, although price measurement in the relevant industries is difficult, so there is considerable uncertainty around our estimates of real GVA and productivity growth. Classification-JEL: Keywords: Productivity, Measurement, Non-Profit, United Kingdom, Output, NPISH Journal: International Productivity Monitor Pages: 34-66 Volume: 44 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/44/IPM_44_Martin_Franklin.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:44:y:2023:2 Template-Type: ReDIF-Article 1.0 Author-Name: Reitze Gouma Author-Email: f.r.gouma@rug.nl Author-Name: Robert Inklaar Author-Email: r.c.inklaar@rug.nl Title: Capital Measurement and Productivity Growth Across International Databases Abstract: A country’s multifactor productivity (MFP) growth, the growth of GDP that is not accounted for by growth of factor inputs, is of great interest as an indicator of living standards and technological progress. Yet different well-established databases show markedly different MFP growth rates for the same country and period. In this article, we show that differences in the measurement of capital input can account for one-third of the range of MFP growth rates across databases. Harmonizing a series of methodological choices for capital measurement substantially reduces variation across databases, but sizeable differences remain. This work highlights the continued relevance of these choices and can inform users who try to understand differences between databases and assess the robustness of differences in MFP growth across countries to measurement choices. Classification-JEL: Keywords: Productivity, Measurement, Capital, Databases, Multifactor Productivity Journal: International Productivity Monitor Pages: 67-88 Volume: 44 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/44/IPM_44_Gouma_Inklaar.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:44:y:2023:3 Template-Type: ReDIF-Article 1.0 Author-Name: Abdul A. Erumban Author-Email: a.a.erumban@rug.nl Title: The Falling Productivity in West Asian Arab Countries Since the 1980s: Causes, Consequences, and Cures Abstract: This article analyzes the macro trends in real per capita GDP and productivity in 12 West Asian Arab countries, distinguishing between the oil-rich GCC economies and the non-GCC West Asian Arab economies. We use a panel data econometric analysis to understand the trade-off between productivity and job creation in the region. Further, we examine the sources of aggregate labour productivity growth in terms of a) structural change and within-industry productivity improvements and b) capital deepening and total factor productivity growth. Although the nature of productivity problems in the two groups of countries - the GCC and non-GCC West Asian Arab economies - differ, the challenges in addressing those are substantial for both. Developing a vibrant private sector that can foster productivity growth is a common challenge for both groups of countries. The inability to embrace innovation and technology and to translate investment in capital to productivity are important impediments to boosting productivity growth. Focusing on technology and innovation, continuing the efforts to diversify away from oil, and upskilling the local workforce are essential to creating more productive jobs for the native population. Classification-JEL: Keywords: Productivity, West Asian Arab, GCC, Gulf Cooperation Council, Panel Journal: International Productivity Monitor Pages: 89-119 Volume: 44 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/44/IPM_44_Erumban.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:44:y:2023:4 Template-Type: ReDIF-Article 1.0 Author-Name: Martin Neil Baily Author-Email: mbaily@brookings.edu Title: Lessons from a Career in Productivity Research: Some Answers, A Glimpse of the Future, and Much Left to Learn Abstract: This study presents lessons learned from a career in productivity research. It examines the extent to which the key empirical questions about productivity have been answered. Aggregate and industry growth data are reviewed and show how a few industries contribute a lot to overall growth; notable is the large contribution of high-tech manufacturing to U.S. TFP growth (also the case for Japan). There is an extended summary of the lessons learned from cross-country comparisons of the levels of productivity in different industries using business economics information. Strong competitive intensity is positive for productivity, while regulations and trade restrictions are negative. The article concludes with an optimistic note on the productivity impact of generative AI. Classification-JEL: Keywords: Productivity, Industry, Cross-Country, AI, Competition, Trade Journal: International Productivity Monitor Pages: 120-149 Volume: 44 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/44/IPM_44_Baily.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:44:y:2023:5 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk. Title: Editors’ Overview Abstract: The 45th issue of the International Productivity Monitor contains eight articles. The first part of the issue features five articles in a symposium on Canada’s productivity performance which includes contributions from Finance Canada, Innovation, Science and Economic Development Canada, Statistics Canada, and the Centre for the Study of Living Standards. The second part of the issue has three articles on measurement issues related to capital, capacity utilization, and productivity. Classification-JEL: Keywords: Productivity, Canada, Measurement, Capital, Capacity Utilization Journal: International Productivity Monitor Pages: 1-4 Volume: 45 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/45/IPM_45_Editors.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:45:y:2023:0 Template-Type: ReDIF-Article 1.0 Author-Name: Chris Haun Author-Email: chrisghaun@gmail.com Author-Name: Tim Sargent Author-Email: tim.sargent@csls.ca Title: Decomposing Canada’s Post-2000 Productivity Performance and Pandemic Era Productivity Slowdown Abstract: Labour productivity growth in Canada has been significantly lower since 2000, and has fallen further since 2019. In this article we examine why this has occurred. We approach the question from three angles: first we look at how Canada’s performance compares to other OECD countries, particularly the United States; second, we decompose Canadian productivity growth by sector, and look to see to what extent slower productivity growth is due to lower growth within sectors, or reallocations across sectors; and finally we perform a growth accounting exercise in order to understand the relative contributions of multifactor productivity, capital intensity and labour quality. We find that Canada’s productivity growth since 2000 has been similar to peer countries, but that the level of productivity is lower than for almost all other peer countries. Weak productivity growth after 2000 is largely attributable to weak productivity within sectors rather than sectoral reallocation. We also find that the slowdown in productivity growth post-2000 relative to 1981-2000 is largely a result of declines in multifactor productivity. However, during the latter part of the post-2000 period there was a pronounced slowdown in capital growth, particularly in ICT, that put downward pressure on productivity growth. More recently, productivity growth over the 2019-2022 period has been very weak. As a result, returning even to the pre-pandemic levels of productivity growth in the near term will be challenging. Classification-JEL: Keywords: Productivity, Canada, Slowdown, Re-allocation, Within-Sectors, ICT Journal: International Productivity Monitor Pages: 5-27 Volume: 45 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/45/IPM_45_Haun.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:45:y:2023:1 Template-Type: ReDIF-Article 1.0 Author-Name: Wulong Gu Author-Email: wulong.gu@statcan.gc.ca Author-Name: Michael Willox Author-Email: michael.willox@statcan.gc.ca Title: The Post-2001 Productivity Growth Divergence between Canada and the United States Abstract: The high degree of integration between the Canadian and the U.S. economies promotes sharing of technologies and innovation spillovers that are conducive to long-term productivity growth convergence. However, since 2001 labour productivity growth rates have diverged in sharp contrast to the previous four decades. A comparison of labour productivity growth decomposed into contributions by industry for both countries reveals that the information and cultural services industry has played an outsized role in the divergence, the start of which coincides with the dot-com recession of the early 2000s. Limits on foreign investment, most notably but not exclusively related to telecommunications, and strong output price growth relative to the United States are key factors for undertaking a simple counterfactual analysis to evaluate the role of competitive intensity in the information and cultural services industry. Estimates of markups and their impact on labour productivity growth suggest that limited competition has significantly reduced the productivity performance of that industry as well as the performances of others that are dependent on its services as intermediate inputs. Classification-JEL: Keywords: Productivity, Canada, United States, Dot-com Recession, Competition Journal: International Productivity Monitor Pages: 27-60 Volume: 45 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/45/IPM_45_Gu.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:45:y:2023:2 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos Rosell Author-Email: carlos.rosell@fin.gc.ca Author-Name: Kaleigh Dowsett Author-Email: Author-Name: Nelson Paterson Author-Email: Title: A Critical Juncture: Assessing Canada's Productivity Performance and Future Prospects Abstract: It is widely acknowledged that Canada has faced long-standing issues with productivity growth, both in comparison to its past performance and relative to other advanced economies. Additionally, it is recognized that as the transformation brought on by population aging continues, improvements in the living standards of Canadians will increasingly depend on productivity growth. This situation arises at a time when Canada, along with the global economy, is at the forefront of major structural transformations, including the green transition, the realignment of global trade, and the increasing digitization and use of AI. The necessity to adapt to the scale and scope of these transformations will create pressures for all economic actors to make renewed efforts to address Canada’s longstanding productivity challenges. To better understand the direction of Canada’s future productivity growth, this article chronicles Canada's productivity growth over recent decades and highlights key structural factors that have likely constrained Canada’s productivity performance. We then explore how these factors might shape the trajectory of productivity growth in the context of these impending structural transformations and identify areas where further research should be prioritized. Classification-JEL: Keywords: Productivity, Canada, Green Transition, Global Trade, Digitization Journal: International Productivity Monitor Pages: 61-92 Volume: 45 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/45/IPM_45_Rossel.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:45:y:2023:3 Template-Type: ReDIF-Article 1.0 Author-Name: Jonathan Barr Author-Email: Jonathan.Barr@ised-isde.gc.ca Author-Name: Peter Foltin Author-Email: Author-Name: Jianmin Tang Author-Email: Title: Recent Productivity Trends in Canada: Navigating the Twin Transitions of Green and Digitalization Abstract: Canada, like other countries, is undergoing an economic transformation as a result of the green and digital transitions. These megatrends create new challenges and opportunities for productivity growth. The green transition could place downward pressure on productivity growth given the current structure of the Canadian economy. That said, the Porter Hypothesis posits that well-formulated environmental regulations can actually spur innovation, which can in turn stimulate productivity. Canada’s ICT and digitally intensive sectors have seen strong productivity growth since 2000, but Canada’s overall performance in digitally- and R&D-intensive sectors trails other G7 countries. Embracing emerging clean and digital technologies and helping small and medium-sized business adopt them remain important issues to help unlock new productivity opportunities in Canada. Classification-JEL: Keywords: Productivity, Canada, Green Transition, Porter Hypothesis, Innovation ,G7 Countries Journal: International Productivity Monitor Pages: 93-119 Volume: 45 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/45/IPM_45_Barr.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:45:y:2023:4 Template-Type: ReDIF-Article 1.0 Author-Name: Iain Cockburn Author-Email: cockburn@bu.edu Author-Name: Megan MacGarvie Author-Email: mmacgarv@bu.edu Author-Name: John McKeon Author-Email: jmckeon@bu.edu Title: Canada’s Patent Productivity Paradox: Recent Trends and Implications for Future Productivity Growth Abstract: Canada’s slow productivity growth rate relative to peer countries has been the focus of considerable attention among academics and policymakers. In contrast to the relatively flat trajectory for total factor productivity, Canada’s production of patents has grown considerably in the last three decades. In this article, we examine changes in Canadian patenting over the past 30 years, with a view to understanding this “patent productivity paradox”: slower productivity growth than might be expected given significant increases in patenting. We draw on recent literature on patents as a measure of innovation as well as literature on the relationship between patents and productivity to study this paradox. We propose several explanations for the disconnect between TFP growth and patenting and examine the evidence. We find that the weaker relationship between productivity and patenting in Canada is not explained by the relative rate of invention in information and communications technology, nor by lower invention quality. However, we find suggestive evidence that foreign ownership of patents and inventor migration help to explain the weaker relationship between productivity and patenting in Canada. Classification-JEL: Keywords: Productivity, Canada, Patent, Ownership, Migration Journal: International Productivity Monitor Pages: 120-154 Volume: 45 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/45/IPM_45_Macgarvie.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:45:y:2023:5 Template-Type: ReDIF-Article 1.0 Author-Name: Pierre-Alain Pionnier Author-Email: pierre-alain.pionnier@oecd.org Author-Name: Belén Zinni Author-Email: belen.zinni@oecd.org Author-Name: Kéa Baret Author-Email: k.baret@unistra.fr Title: Measuring Capital and Multifactor Productivity: The Role of Asset Depreciation and Initial Capital Stock Estimates Abstract: This paper suggests a meaningful way to compare how the depreciation and retirement of assets are estimated in the national accounts of different countries and shows large differences. Applying the same assumptions in the US as in other G7 countries would reduce the US net capital stock by up to 1/3 and increase US GDP by up to 0.5 per cent. The growth rates of capital services and MFP would be less affected. This paper also considers two commonly used methods to estimate initial capital stocks and the impact they may have on measured capital and MFP. They assume that either investment growth rates or capital-stock-to-output ratios are constant over time. The first one is misleading because it fails to account for trends and fluctuations in real-estate investment. The second one works well for the US but may be less reliable for other countries. Overall, this paper calls for a more frequent review of asset depreciation patterns by statistical agencies, and for extending investment series to the maximum extent before relying on crude methods to estimate initial capital stocks. Classification-JEL: Keywords: Capital Productivity, Multifactor Productivity, Asset Depreciation, Capital Stock Journal: International Productivity Monitor Pages: 155-177 Volume: 45 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/45/IPM_45_Pionnier.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:45:y:2023:6 Template-Type: ReDIF-Article 1.0 Author-Name: Jianmin Tang Author-Email: jianmin.tang@ised-isde.gc.ca Author-Name: Weimin Wang Author-Email: weimin.wang@statcan.gc.ca Title: Capacity Utilization and Production Function Estimation: Implications for Productivity Analysis Abstract: During business cycles and disruptions of global value chains, capacity utilization has important implications for explaining variations in productivity and for evaluating the effectiveness of a certain investments such as R&D and ICTs. Unfortunately, data on capacity utilization is not easily available, especially at the firm level. This article develops and evaluates a methodology for measuring capacity utilization at the micro level. Unlike the literature using ad-hoc proxies (for example, the ratio of energy use to capital stock) or ex-post return to capital which is endogenous to productivity shocks, the new measure is practical and easily implemented. Importantly, it is based on the theory of the firm in terms of profit-maximizing and price-taking and is exogenous to productivity shocks. Using Canadian micro data, this article shows that the developed new measure under the assumption of capital being not adjustable in the short term explain well the variations in firm productivity. It also finds that controlling for capacity utilization may be essential in evaluating the economic impact of certain investments such as in ICT. Classification-JEL: Keywords: Productivity, Capacity Utilization, R&D, ICT, Micro Data Journal: International Productivity Monitor Pages: 178-199 Volume: 45 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/45/IPM_45_Tang.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:45:y:2023:7 Template-Type: ReDIF-Article 1.0 Author-Name: Nicholas Oulton Author-Email: n.oulton@lse.ac.uk Title: Measuring Productivity: The Response of National Statistical Institutes to the OECD’s Productivity and Capital Manuals Abstract: In 2001, the Organization for Economic Cooperation and Development issued its Productivity Manual, alongside its Capital Manual (the latter was updated in 2009). These Manuals set out a detailed guide for National Statistical Institutes (NSIs) on how to expand their national accounts to incorporate a production account using the KLEMS methodology. In many cases full acceptance of these proposals might well require changes to national accounts methodology, for instance the adoption of double deflation, and also a considerable statistical effort, such as incorporating data on wages and employment into the national accounts in a consistent way. This article summarizes the response of some leading NSIs to this challenge and assesses how far they have succeeded in meeting it. Classification-JEL: Keywords: Productivity, Measurement, OECD, NSI, KLEMS, National Accounts Journal: International Productivity Monitor Pages: 200-225 Volume: 45 Year: 2023 Month: Fall File-URL: http://www.csls.ca/ipm/45/IPM_45_Oulton.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:45:y:2023:8 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: andrew.sharpe@csls.ca Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk. Title: Editors’ Overview Abstract: The 46th issue of the International Productivity Monitor contains five articles. The issue features a symposium of three articles on international productivity performance with a particular focus on the role of intangible capital. Two additional articles discuss the reasons for the recent fall in GDP per capita in Canada and the relationship between productivity and managerial quality. Classification-JEL: Keywords: Productivity, International, Intangible, Capital, GDP Journal: International Productivity Monitor Pages: 1-2 Volume: 46 Year: 2024 Month: Spring File-URL: https://www.csls.ca/ipm/46/IPM_46_Editors.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:46:y:2024:0 Template-Type: ReDIF-Article 1.0 Author-Name: Filippo Bontadini Author-Email: fbontadini@luiss.it Author-Name: Carol Corrado Author-Email: cac289@georgetown.edu Author-Name: Jonathan Haskel Author-Email: j.haskel@imperial.ac.uk Author-Name: Massimiliano Iommi Author-Email: massimiliano.iommi@unifi.it Author-Name: Cecilia Jona-Lasinio Author-Email: cecilia.jonalasinio@luissbusinessschool.it Author-Name: Tsutomu Miyagawa Author-Email: tsutomu.miyagawa@gakushuin.ac.jp Title: Intangible Capital, TFP Growth and Green Shoots in New Productivity Data Abstract: This article undertakes a comparative analysis of recent productivity growth in European economies, Japan, the United Kingdom, and the United States using the EU KLEMS & INTANProd database. The influence of intangible capital on productivity growth and insights from combining long historical time series for TFP with the current estimates in EU KLEMS & INTANProd are central features of our analysis. Our comparative analysis of growth decompositions before and after the productivity slowdown suggests that productivity growth in the 2014-2019 period in advanced economies has been relatively strong, consistent with a slew of the newer digital technologies (cloud, big data, AI) gaining wider use. Recent research finds that mechanisms governing knowledge diffusion are weaker recently than in the past—implying that advanced economies are not experiencing their full potential for productivity growth. Unless policies or voluntary industry actions create new platforms for technology extension and data sharing (e.g., open banking policies), the potential for spillovers to amplify intangible-investment induced innovations will be less strong than they have been in the past. Classification-JEL: Keywords: Productivity, Intangible, EU KLEMS, INTANProd, spillover Journal: International Productivity Monitor Pages: 3-37 Volume: 46 Year: 2024 Month: Spring File-URL: https://www.csls.ca/ipm/46/IPM_46%20_Corrado.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:46:y:2024:1 Template-Type: ReDIF-Article 1.0 Author-Name: Bart van Ark Author-Email: bart.vanark@manchester.ac.uk Author-Name: Klaas de Vries Author-Email: k.devries@cbs.nl Author-Name: Abdul Erumban Author-Email: a.a.erumban@rug.n Title: Are Intangibles Running out of Steam? Abstract: This article looks at the role of intangibles in explaining the slowdown in productivity growth for (the average of) nine EU countries, the United Kingdom and the United States from 2011 to 2019 compared to the period before the Global Financial Crisis (GFC). Using the 2023 version of the EUKLEMS-INTANProd industry-level database, we find that while intangible investment continues to increase as a share of nominal GDP, the growth rate of the intangibles capital stock has moderately slowed in real terms. The contribution of intangible capital deepening to labour productivity growth has remained positive though not strong enough to offset the effects of the large decline in tangible capital deepening. We also find a relatively strong slowdown in labour productivity growth for the most intangibleintensive industries, especially in the United Kingdom and the United States. Preliminary econometric analysis suggests little evidence of strong TFP spillovers from intangible capital deepening, there is mixed evidence of interaction effects for business innovation-related intangibles and ICT and non-ICT tangibles. While intangibles have not run out of steam, we conclude that the impact of intangibles on productivity growth has become more complex, especially as business innovation-related investments seem highly complimentary with other types of capital. We advocate for policies focused on broad-based investment in both tangible and intangible assets to facilitate the diffusion of new technologies and knowledge. Classification-JEL: Keywords: Productivity, Intangible, EU KLEMS, INTANProd, Global Financial Crisis Journal: International Productivity Monitor Pages: 38-59 Volume: 46 Year: 2024 Month: Spring File-URL: https://www.csls.ca/ipm/46/IPM_46_vanArk.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:46:y:2024:2 Template-Type: ReDIF-Article 1.0 Author-Name: John Van Reenen Author-Email: j.vanreenen@lse.ac.uk Author-Name: Xuyi Yang Author-Email: xy327@cam.ac.uk Title: Cracking the Productivity Code: An International Comparison of UK Productivity Abstract: We examine the growth and level of UK productivity compared to France, Germany and the United States. There has been a marked slowdown in labour productivity growth: comparing the dozen years before and after the Global Financial Crisis. The average annual growth of the UK’s real value added per hour in the market economy has fallen from 2.5 per cent to 0.5 per cent. Just over half of this two percentage point slowdown is due to slower TFP growth, which is broadly similar in magnitude across countries. Britain experienced a much larger slowdown in the growth of capital intensity than other countries and it is this (alongside a smaller contribution from slow skills growth) which accounts for the particularly severe ‘productivity puzzle’. The level of UK labour productivity is also low compared to peers, especially the United States. In 2019, lower tangible and intangible capital intensity accounted for about half of this gap. These findings suggest that UK policy should focus on the problem of chronic under-investment. Classification-JEL: Keywords: Productivity, Slowdown, United Kingdom, Capital Intensity, Global Financial Crisis Journal: International Productivity Monitor Pages: 60-82 Volume: 46 Year: 2024 Month: Spring File-URL: https://www.csls.ca/ipm/46/IPM_46_VanReenen.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:46:y:2024:3 Template-Type: ReDIF-Article 1.0 Author-Name: Philip Smith Author-Email: phil@philipsmith.ca Title: Accounting for the Decline of Canada’s Real GDP Per Capita since Mid-2022 Abstract: Real GDP per capita has been falling in Canada since mid-2022, while the number of non-permanent residents has been rising sharply. This article discusses how these two developments are linked. The paper identifies six factors currently influencing real GDP per capita: (1) labour productivity; (2) average hours worked per job; (3) the employment rate of the working-age population; (4) the ratio of the working-age population to the permanent resident population (where working-age includes NPRs in that age class); (5) the share of permanent residents in the total population; and (6) the relative rate of growth of the government and non-profit sectors compared to that of the business sector. The relative importance of each of these factors is assessed via a multiplicative decomposition and the analysis indicates the share of permanent residents in the total population is currently the single most important factor. Classification-JEL: Keywords: Productivity, Real GDP, Canada, Permanent Residents Journal: International Productivity Monitor Pages: 83-100 Volume: 46 Year: 2024 Month: Spring File-URL: https://www.csls.ca/ipm/46/IPM_46_Smith.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:46:y:2024:4 Template-Type: ReDIF-Article 1.0 Author-Name: Gilbert Cette Author-Email: gilbert.cette@neoma-bs.fr Author-Name: Jimmy Lopez Author-Email: jimmy.lopez@u-bourgogne.fr Author-Name: Jacques Mairesse Author-Email: jacques.mairesse@ensae.fr Author-Name: Giuseppe Nicoletti Author-Email: nicolettigiuseppe4@gmail.com Title: Employment, Output and Productivity Adjustment During the Great Recession: The Role of Managerial Quality Abstract: This study investigates empirically how differences in managerial practices shaped the macroeconomic recovery from the 2008 Great Recession. We build a country-industry panel over the 2007-2015 period for eighteen industries in nine OECD countries, using an indicator of management quality at the country level based on the categorical scores of managerial practices collected at the firm level by Bloom et al. (2012) and an indicator measuring the industry level shocks caused by the 2008 economic crisis. We then rely on the local projection method pioneered by Jordà (2005) to estimate the impact of the shocks on post-2009 macro developments at different levels of managerial quality. We find that both production and employment were more resilient in countries where management quality is higher, resulting in no significant cumulative impact of management quality on productivity over the recovery. The effects of management on production and employment resilience are stronger for industries deeply affected by the 2008 crisis and go along with wage moderation and a slight increase in the labour share. Classification-JEL: Keywords: Productivity, Great Recession, Management, Quality Journal: International Productivity Monitor Pages: 101-108 Volume: 46 Year: 2024 Month: Spring File-URL: https://www.csls.ca/ipm/46/IPM_46_Cette.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:46:y:2024:5 Template-Type: ReDIF-Article 1.0 Author-Name: Catherine L. Mann Author-Email: clmannecon@gmail.com Title: Could Domestic Industrial Policies, Even With Global Fragmentation, Revive Productivity? Abstract: Many policymakers are using industrial policies more actively, while also pursuing policies tending to fragment global markets. Can this combination revive productivity growth? This essay starts with noting that an average productivity measure used to assess macroeconomic performance often masks important distributions of productivity outcomes, which matter economically, socially, and politically. It then reviews the frameworks that rationalize industrial policies and which derive the outcomes of global engagement. It then considers current empirical assessments of the effectiveness of industrial policies and current modeling work on the consequences of global fragmentation. It presents an overview of two new databases on detailed industrial policies as being deployed by policymakers. With regard to the question posed in the title, the answer is most surely ‘no’. First because the deployed industrial policies rarely match the framework rationalizations. Second because the majority of those policies further fragment global markets. Therefore, globalization gains are being foregone while industrial policies are being mistargeted. That combination is not likely to revive productivity growth nor improve productivity distributions. Classification-JEL: Keywords: Industrial Policy, Productivity, Global, Fragmentation Journal: International Productivity Monitor Pages: 3-19 Volume: 47 Year: 2024 Month: Fall File-URL: https://www.csls.ca/ipm/47/Mann_final.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:47:y:2024:1 Template-Type: ReDIF-Article 1.0 Author-Name: Diane Coyle Author-Email: clmannecon@gmail.com Author-Name: Ayantola Alayande Author-Email: ayantola.alayande@trinity.ox.ac.uk Title: Productivity and Industrial Policy by Design: The UK Experience Abstract: The number of industrial policy interventions and the scale of the public expenditure involved is on the increase globally. The United Kingdom has a history of churn with respect to industrial policies, and has largely been averse to policy activism in this area since 1980. This article presents case studies of three UK sectors– life sciences and pharma, financial services and the creative industries– arguing that despite the anti-activism policy rhetoric for much of the past four decades these have experienced sectoral industrial policies ‘by accident’, involving classic policy tools used without a strategic framework. Policies affecting business decisions cannot avoid having an impact; acts of omission are policy choices, just as much as positive decisions. We argue that, although counterfactual outcomes are necessarily speculative, productivity outcomes would be better if policies impacting key sectors of the economy were developed by design, due to improved policy co-ordination, derisking of investment and more effective realization of spillovers. Classification-JEL: Keywords: Industrial Policy, Productivity, United Kingdom, Spillover Journal: International Productivity Monitor Pages: 20-38 Volume: 47 Year: 2024 Month: Fall File-URL: https://www.csls.ca/ipm/47/Coyle_final.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:47:y:2024:2 Template-Type: ReDIF-Article 1.0 Author-Name: Tim Sargent Author-Email: tim.sargent@macdonaldlaurier.ca Title: How Does Industrial Policy Impact Output, Hours and Productivity? The Canadian Experience Abstract: The article looks at the Canadian experience with industrial policy, and whether those industries that have been the principal focus of industrial policy have performed better than comparable sectors. It outlines the history of industrial policy in Canada and examine the empirical performance of four sectors: steel mills, aluminum smelting, auto assembly and aerospace. It finds that while the aluminum industry has performed better than comparable industries in terms of output, total hours worked and productivity, the same is not true of the other three sectors, which have had a relatively disappointing performance. While the analysis cannot unequivocally prove that industrial policy impact positively or negatively on productivity growth, it acknowledges the possibility that performance could have been worse without such policies. The article also highlights that industrial policy can maintain higher overall productivity by supporting high-productivity industries, preventing their decline. Classification-JEL: Keywords: Industrial Policy, Productivity, Canada, Sector Journal: International Productivity Monitor Pages: 39-53 Volume: 47 Year: 2024 Month: Fall File-URL: https://www.csls.ca/ipm/47/Sargent_final.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:47:y:2024:3 Template-Type: ReDIF-Article 1.0 Author-Name: Dirk Pilat Author-Email: dirkpilatparis@gmail.com Title: Climate Change and Productivity– An Exploration Abstract: This article explores the links between climate change and productivity. It finds that while much debate has focused on labour and multifactor productivity growth, improving productivity in the use of energy and materials is crucial to achieving net zero and requires much greater emphasis in productivity analysis. Although complementary productivity measures are available, these have not yet become mainstream. Productivity measurement also needs to be improved. Mainstream economic studies have long significantly underestimated the damaging impacts of climate change on growth and productivity. At the same time, studies today may overestimate the long-term costs of policies to address climate change. Standard measures of productivity show few signs of a transition to more sustainable growth. Multi-factor productivity growth– the combined efficiency of factors inputshas been falling at the global level, and the transition to net zero will likely require large investments in resource-intensive fixed capital, and not just intangible and human capital. While energy and materials productivity are improving, global material use continues to grow rapidly. Moreover, although CO2 emissions have decoupled from GDP growth in many advanced economies, the current pace of decoupling is far below what is needed for net zero. The challenge for policy is how to design climate change policies to meet the global objective of net zero while limiting the impacts on productivity growth and living standards. Classification-JEL: Keywords: Climate Change, Productivity, Multifactor, Net Zero Journal: International Productivity Monitor Pages: 54-86 Volume: 47 Year: 2024 Month: Fall File-URL: https://www.csls.ca/ipm/47/Pilat_final.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:47:y:2024:4 Template-Type: ReDIF-Article 1.0 Author-Name: Carl Obst Author-Email: carl.obst@ideeagroup.com Title: Using Ecosystem Accounting to Integrate the Environment in Measures of Multifactor Productivity Abstract: There is increasing recognition of the relevance of integrating environmental considerations within standard macroeconomic measures including GDP and national wealth and, by extension to measures of multifactor productivity (MFP). A range of approaches to measuring environmentally adjusted MFP (EAMFP) have been developed over the past decade which variously adjust the measure of output or recognize explicitly natural capital inputs. This article summarizes the main approaches to EAMFP and discusses their merits from a national accounting principles perspective, identifying some concerns on potential double counting of environmental contributions and effects. It then considers the potential of ecosystem accounting as described in the System of Environmental-Economic Accounting (SEEA) Ecosystem Accounting to offer an alternative framing for integrating the environment into economy-wide MFP measures. Classification-JEL: Keywords: Climate Change, Productivity, Multifactor, Ecosystem, Environment, Accounting Journal: International Productivity Monitor Pages: 87-108 Volume: 47 Year: 2024 Month: Fall File-URL: https://www.csls.ca/ipm/47/Obst_final.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:47:y:2024:5 Template-Type: ReDIF-Article 1.0 Author-Name: Christina Caron Author-Email: christinalcaron@gmail.com. Title: Eroding Natural Capital: An Alternative Explanation for the Secular Decline in Productivity Growth Abstract: Labour productivity and multifactor productivity (MFP) growth rates have been declining in advanced economies for several decades, and the decline in labour productivity growth has extended to emerging economies over the past fifteen years. Global MFP growth has flatlined since 2007 in both advanced and emerging economies. While many explanations for these trends have been advanced, no clear consensus has yet emerged. However, the pervasive and persistent nature of the declines signals that factors of global scope and extended duration are likely implicated. This article presents an alternative explanation for declining productivity growth: that the erosion of natural capital has been occurring on a sufficiently large scale globally to exert significant and growing downward pressure on productivity growth. Accordingly, a fundamental transformation in the economic role of natural capital has taken place, from productivity accelerator to productivity decelerator. These effects have been obscured due to the absence of natural capital from conventional economic frameworks and production functions. Classification-JEL: Keywords: Natural Capital, Productivity, Decline, Growth Rate Journal: International Productivity Monitor Pages: 109-147 Volume: 47 Year: 2024 Month: Fall File-URL: https://www.csls.ca/ipm/47/Caron_final.pdf File-Format: Application/pdf Handle: RePEc:sls:ipmsls:v:47:y:2024:6