Template-type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: csls@csls.ca Title: Editor's Overview Abstract: The fifth issue of the International Productivity Monitor published by the Centre for the Study of Living Standards contains six articles. Topics covered are: the Canada-US manufacturing productivity gap; trends in Canadian living standards; the impact of economic reform on British productivity growth; productivity and policy reform in Australia; the measurement of government productivity; and a review of a recent volume on productivity issues in Canada. Classification-JEL: O51, O52, O56, J24, D24 Keywords: Productivity, Labour Productivity, Labor Productivity, Growth, Canada, United States, Britain, United Kingdom, Australia, Technology, Innovation, Research, Development, Manufacturing, Policy, Reform, Government, Measurement, Standard of Living, Growth Acceleration, Capital, Capital Intensity Journal: International Productivity Monitor Pages: 1-2 Volume: 5 Year: 2002 Month: Fall File-URL: http://www.csls.ca/ipm/5/overview-e.pdf File-Format: Application/pdf File-Size: 93 KB File-URL: http://www.csls.ca/ipm/5/overview-f.pdf File-Function: version en francais, pp:1-2 File-Format: Application/pdf File-Size: 96 KB Handle: RePEc:sls:ipmsls:v:5:y:2002:0 Template-type: ReDIF-Article 1.0 Author-Name: Jeffrey I. Bernstein Author-Email: jeffb@ccs.carleton.ca Author-Name: Richard G. Harris Author-Email: rharris@sfu.ca Author-Name: Andrew Sharpe Author-Email: csls@csls.ca Title: The Widening Canada-US Productivity Gap in Manufaturing Abstract: In this article, Jeffrey I. Bernstein of Carleton University, Richard G. Harris from Simon Fraser University, and Andrew Sharpe from the Centre for the Study of Living Standards provide a comprehensive analysis of the widening of the Canada-US manufacturing productivity gap. Since 1994, labour productivity growth in manufacturing in the United States has greatly exceeded that recorded in Canada. Output per hour in Canada fell 20 percentage points from 87 per cent of the US level in 1994 to 67 per cent in 2001. This development has been responsible for most of the widening of the aggregate Canada-US labour productivity gap. The authors find that the growth in the gap largely reflects the acceleration of productivity growth in US high-tech manufacturing sector. The Canadian high-sector is smaller than its US counterpart and experienced much weaker productivity growth. It is estimated that these two factors themselves account for 70 per cent of the widening of the gap over the 1994-2000 period. Faster growth in capital intensity of production in the United States also played a complementary role in the growth of the gap, a development in part fostered by the greater increase in the price of labour relative to that of investment goods in the United States than in Canada. This was due to slower labour compensation growth and, to a lesser extent, a smaller decline in the price of investment goods in Canada. The depreciation of the value of the Canadian dollar relative to the US dollar played some role in this latter development. The authors conclude that Canadian economic policies have not directly contributed in any significant manner to the widening of the gap. Classification-JEL: L60, J24, O51, J23, D24 Keywords: Canada, United States, Manufacturing, Labor Productivity, Labour Productivity, Productivity, Employment, Capital Intensity, Technological Change, Innovation, High-Tech, Capacity, Cyclical, Investment, Relative Price, Relative Price of Labour, Relative Price of Investment Journal: International Productivity Monitor Pages: 3-22 Volume: 5 Year: 2002 Month: Fall File-URL: http://www.csls.ca/ipm/5/mfg-e.pdf File-Format: Application/pdf File-Size: 234 KB File-URL: http://www.csls.ca/ipm/5/mfg-f.pdf File-Function: version en francais, pp:3-24 File-Format: Application/pdf File-Size: 275 KB Handle: RePEc:sls:ipmsls:v:5:y:2002:1 Template-type: ReDIF-Article 1.0 Author-Name: Andrew Sharpe Author-Email: csls@csls.ca Title: Raising Canadian Living Standards: A Framework for Analysis Abstract: The living standards in Canada, defined as real GDP per capita, declined relative to those in the United States in the 1990s. A key challenge facing Canadians is the reversal of this situation. In this article, Andrew Sharpe of the Centre for the Study of Living Standards develops a framework for the analysis of living standards and outlines a strategy to raise living standards. Sharpe first examines trends in and determinants of living standards in Canada. He finds that over the 1946-2001 period productivity growth accounted for all the growth in living standards. Large declines in average hours worked reduced living standard growth, but increased labour force participation and a more favourable demographic structure made a positive contribution. Sharpe notes that living standards could be increased by lower unemployment, greater labour force participation, and longer working time, but points out that there is little scope for long-term improvement from these sources. Rather, he argues, productivity growth represents the only sustained avenue for living standards growth. With our level of aggregate labour productivity 16 per cent below the US level, Canada has the potential to reduce much of the productivity gap with the United States and possibly even to eliminate it completely. Such a development would allow Canadians to achieve US levels of real GDP pr capita, or if they so chose, to take the productivity gains in the form of increased leisure. Classification-JEL: O51, O57, J24, E66, J11 Keywords: Canada, United States, Living Standards, Quality of Life, Well-being, Wellbeing, Labour Productivity, Labor Productivity, Productivity, Income Gap, Income, Gap, Growth, Increase, Improve, Target, Labour Force Participation, Participation, Working Age, Demographic, Fertility, Age Journal: International Productivity Monitor Pages: 23-40 Volume: 5 Year: 2002 Month: Fall File-URL: http://www.csls.ca/ipm/5/sharpe-e.pdf File-Format: Application/pdf File-Size: 222 KB File-URL: http://www.csls.ca/ipm/5/sharpe-f.pdf File-Function: version en francais, pp:25-43 File-Format: Application/pdf File-Size: 256 KB Handle: RePEc:sls:ipmsls:v:5:y:2002:2 Template-type: ReDIF-Article 1.0 Author-Name: David Card Author-Email: card@econ.berkely.edu Author-Name: Richard B. Freeman Title: What Have Two Decades of British Economic Reform Delivered in Terms of Productivity Growth? Abstract: The UK economy has undergone significant market reforms over the last two decades. A key question for productivity researchers is the impact of these reforms on productivity growth. In this article, Richard B. Freeman of the London School of Economics, Harvard University and the NBER and David Card of the University of California at Berkeley and the NBER examine trends in productivity growth in Britain and other major developed countries and estimate the impact of British economic reforms on British performance. Freeman and Card find that developments in the UK economy cannot be readily explained by standard macro-economic changes in labour or capital. They note that economic reforms were more important in the UK than in other countries and that the UK after 1979 arrested the nearly century-long trend in economic decline of the UK relative to its historic competitors, France and Germany. They conclude that reforms in the area of union-management relations, privatization, profit and share ownership, and self-employment increased UK productivity growth 0.35 per cent per year over the 1979-1999 period, accounting for one quarter of the pick-up in productivity between the 1960-79 and 1979-1999 periods. Classification-JEL: O52, O57, E61, E66 Keywords: Britain, United Kingdom, Germany, France, Growth, Living Standards, Market Reforms, Policy Reforms, Policy, Reforms, Living Standards, Labour Quality, Capital Intensity, Capital, Thatcher, Pro-Market, Competitiveness, Relative, Acceleration, Growth Acceleration, Average Income Journal: International Productivity Monitor Pages: 41-52 Volume: 5 Year: 2002 Month: Fall File-URL: http://www.csls.ca/ipm/5/card-e.pdf File-Format: Application/pdf File-Size: 181 KB File-URL: http://www.csls.ca/ipm/5/card-f.pdf File-Function: version en francais, pp:44-57 File-Format: Application/pdf File-Size: 221 KB Handle: RePEc:sls:ipmsls:v:5:y:2002:3 Template-type: ReDIF-Article 1.0 Author-Name: Dean Parham Author-Email: dparham@pc.gov.au Title: Productivity and Policy Reform in Australia Abstract: Australia has historically been Canada's poorer cousin. But a pick-up in productivity growth in the 1990s has raised Australian living standards to Canadian levels. In this article, Dean Parham of the Australian Productivity Commission provides an overview of Australian economic performance and the policy reforms that turned around Australia's laggard productivity growth. He first points out that during the first half of the 20th century Australia enjoyed one of the highest levels of labour productivity in the world. But Australia never experienced productivity convergence in the postwar period up to the 1990 and saw its productivity and GDP per capita ranking decline over this period. Productivity growth then picked up in the 1990s, with output per hour advancing 2.3 per cent per year in 1990-2001 compared to 1.5 per cent in 1973-1990. It was increased multifactor productivity growth, not capital deepening, that drove this acceleration. Parham makes the case that policy reforms explain much of Australia's improved productivity performance. He identifies three broad areas of policy reform as particularly important in fostering productivity growth: sharper competition; greater openness to trade, investment and technology; and greater flexibility for businesses to adjust production and distribution processes. These reforms spurred the Australian economy to to embark upon a much delayed productivity catch-up. Classification-JEL: O56, O57, J24, E61 Keywords: Australia, Canada, Productivity, Labour Productivity, Policy, Policy Reforms, Policy Reform, Living Standards, Growth, Productivity Growth, Average Income, Capital Deepening, Capital, ICT, Information, Communication, Technology, MFP, Multifactor Productivity, Multi-factor Productivity, Total Factor Productivity, Skills Pages: 53-63 Volume: 5 Year: 2002 Month: Fall File-URL: http://www.csls.ca/ipm/5/parham-e.pdf File-Format: Application/pdf File-Size: 177 KB File-URL: http://www.csls.ca/ipm/5/parham-f.pdf File-Function: version en francais, pp:58-69 File-Format: Application/pdf File-Size: 213 KB Handle: RePEc:sls:ipmsls:v:5:y:2002:4 Template-type: ReDIF-Article 1.0 Author-Name: Andrew Hughes Title: Guide to the Measurement of Government Productivity Abstract: The measurement of government productivity poses a challenge for economists. The lack of a marketed output and the multidimensional nature of objectives for government agencies in particular make the measurement of productivity in government more difficult than in the business sector. This article by Andrew Hughes of the New South Wales Treasury in Australia provides a guide to the issue of productivity measurement in government. Hughes provides a non-technical overview of the different quantitative techniques that can be used to gauge government performance, including index number techniques such as partial factor productivity and total factor productivity; statistical techniques such as ordinary least squares and stochastic frontier analysis; and mathematical techniques such as data development analysis. He gives a number of examples to illustrate the use of these techniques. Hughes concludes that general government agencies have much to gain from the application of quantitative techniques to the measurement of their economic performance. Classification-JEL: C81, C82, D24, L23 Keywords: Government, Measurement, Measurement of Government, Output Measurement, Output, Government Productivity, Services Measurement, Productivity Growth, Government Efficiency, Efficiency, Government Performance, Performance Monitoring, Unpriced Output, Non-Market, Price Journal: International Productivity Monitor Pages: 64-77 Volume: 5 Year: 2002 Month: Fall File-URL: http://www.csls.ca/ipm/5/hughes-e.pdf File-Format: Application/pdf File-Size: 211 KB File-URL: http://www.csls.ca/ipm/5/hughes-f.pdf File-Function: version en francais, pp:70-84 File-Format: Application/pdf File-Size: 252 KB Handle: RePEc:sls:ipmsls:v:5:y:2002:5 Template-type: ReDIF-Article 1.0 Author-Name: Ian A. Stewart Title: Productivity Issues in Canada: A Review Article Abstract: This article, by Ian A. Stewart, is a review of the recently released Industry Canada research volume Productivity Issues in Canada, edited by Someshwar Rao and Andrew Sharpe. Stewart begins by noting that at over 900 pages and 25 papers the volume represents an important contribution to the productivity literature in Canada. He points out that data and measurement issues represent a central theme in the volume. Stewart also comments on what he sees as the diminishing importance of the macroeconomic perspective in the analysis of productivity growth. He believes that the golden age of productivity growth during the 1945-73 period was in large part due to the solid macroeconomic performance of the period, a theme not addressed by any of the papers in the volume. Classification-JEL: O51, O47, O30, J24, D24 Keywords: Productivity, Canada, United States, Growth, Productivity Growth, Measurement, Data Quality, Accuracy, ICT, Information, Communication, Technology, R&D, Research, Development, Research and Development, Innovation, Investment Journal: International Productivity Monitor Pages: 78-81 Volume: 5 Year: 2002 Month: Fall File-URL: http://www.csls.ca/ipm/5/review-e.pdf File-Format: Application/pdf File-Size: 133 KB File-URL: http://www.csls.ca/ipm/5/review-f.pdf File-Function: version en francais, pp:85-89 File-Format: Application/pdf File-Size: 155 KB Handle: RePEc:sls:ipmsls:v:5:y:2002:7