Assessing Aggregate Labour Productivity Trends in Canada and the United States: Total Economy versus Business Sector Perspectives

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Abstract

This article examines the sensitivity of Canada-U.S. productivity growth comparisons to the choice between total economy and business sector measures. It finds that since 1981, the U.S.-Canada productivity growth gap is considerably larger when measured at the business sector level (0.76 percentage points per year) than at the total economy level (0.37 percentage points), primarily because measured non-business sector productivity growth is higher in Canada than in the United States. The article discusses the methodological strengths and weaknesses of each measure and concludes that the appropriate choice depends on the specific purpose of the comparison.

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