NAICS Productivity Study - Technical Note

Labour, Capital and Total Factor Productivity Tables

Technical Note: Description of Data and Method

The Data 

  • Labour - 1987-1996 - For the 1987-1996 period, labour input data by industry are from the Labour Force Survey (LFS) Division of Statistics Canada, for both number of employed workers, and number of hours worked. Only the growth rates of LFS labour input measures are used, not their levels. At the industry level, data on hours of work generally refer to hours worked at the main job only, whereas at the total economy (all industries) level data are available for both hours worked at the main job and hours worked at all jobs. The all jobs measure is preferred for calculating productivity. Therefore, we used an all jobs measure where hours at other than the main job are counted in the same industry as the main job in order to avoid systematically underestimating productivity levels. The number of hours worked in a typical week is multiplied by 52 to give the number of hours worked in a given industry per year. The Labour Force Survey Division cautions that estimates at the 4-digit NAICS level have high sampling variability and should be used with prudence.
  • Labour - 1997- - Starting in 1997, labour input data by industry (total hours worked and total number of jobs) are from the Statistics Canada Productivity Measures. This source of data ensures consistency between the CSLS database and official estimates of labour productivity for years after 1997. It is important to note that LFS data differs from the Productivity Measures data. For some industries the differences are substantial. For example, average annual employment growth from 1997 to 2006 in the leather and allied product manufacturing (316) sub-sector is 5.68 percentage points higher when calculated from the Productivity Accounts than from the Labour Force Survey. It is important to keep these differences in mind when using data before 1997.
  • Capital - End-Year Net Stock data (geometric depreciation) in constant (Laspeyres fixed weights) 1997 dollars are used, obtained from the Investment and Capital Stock Division of Statistics Canada.
  • Value Added - Gross Domestic Product is based on a Laspeyres index up to 1996 and on a Fisher chain weighted index between 1997 and the most current period. In general, however, the most recent two year period is also based on a Laspeyres index since input-output benchmarks are yet to be released. Data are obtained from the Industry Measures and Analysis Division of Statistics Canada.
  • Missing data - absence of data for a given industry/year/province combination prohibits a calculation for that year. Such incidences are marked with "na" (not available). Industries for which there is little or no data for a given year/industry/province are not shown in the tables. For this reason, there is more information available for larger provinces than for smaller provinces.

    Details of the tables

    Labour Productivity

    Table 1 - Value Added per Hour Worked
    Table 2 - Index of Value Added per Hour Worked, 1997=100
    Table 3 - Value Added per Worker Employed
    Table 4 - Index of Value Added per Worker Employed, 1997=100

    GDP is divided by number of workers employed and by number of hours worked for each province and for Canada. Tables 1 and 3 present the calculations in level form for each province and for Canada.

    Capital Productivity

    Table 5 - Value Added/Capital Stock
    Table 6 - Index of Value Added/Capital Stock, 1997=100

    GDP is divided by the value of the capital stock for each industry. Table 5 presents the output/capital ratio for each industry

    Total Factor Productivity

    Table 7 - Total Factor Productivity Indices Using Number of Workers Employed, 1997=100
    Table 8 - Total Factor Productivity Indices Using Number of Hours Worked, 1997=100

    The equation used for calculations is: 

    value added index 
    TFP index = --------------------------------------------------------------------- x 100
                      (labour index labour share) * (capital index capital share)

    where: 

    • value added index is the GDP index

    •  
    • labour index is the index of the labour input. Table 7 uses the index of the number of workers employed and Table 8 uses the index of the number of hours worked. 
    • capital index is the index for capital stock

    •  
    • labour share is based on the national share by industry for 1997, and is based on average earnings and number of employees at the national level from the Survey of Payrolls, Employment and Hours (SEPH). Labour earnings are then expressed as a proportion of GDP for each industry where data are available. For non-manufacturing industries not included in SEPH the total economy average share has been used, and for manufacturing industries not included in SEPH the manufacturing average share has been used.

    •  
    • capital share is defined as (1 - labour share)

    •  
    • 1997=100 for all output and input indices.

      Example for Canada - Total Economy (2003)

    Value added index 124.2
    Labour index 109.9
    Capital index 117.9
    Labour share 46.22%
    Capital share (100-46.2)=53.78%

     
    The total factor productivity index (2003):  124.2 / [(109.9 0.4622) * (117.9 0.5378)] x 100 = 108.8

    This indicates that there has been a 8.8 percent increase in total factor productivity for the Canadian economy from 1997 to 2003.
     


    Questions - Feedback  

    Should you have any questions or feedback on these tables, please contact: 

    Postal address:  

    Andrew Sharpe 
    Executive Director 
    Centre for the Study of Living Standards 
    Suite 500, 111 Sparks Street 
    Ottawa, Ontario K1P 5B5 

    Telephone/e-mail:

    Andrew Sharpe (613) 233-8891
    e-mail info@csls.ca
     
    Fax: (613) 233-8250

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    Last Update: Friday, September 05, 2008 |
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