Measuring Productivity

Transcription

1 Conference on nex seps for he Japanese SNA Tokyo, 25 March 2005 Measuring Produciviy Paul Schreyer, OECD 1

2 Conens of presenaion 1. Why is produciviy imporan? 2. Conceps: labour and muli-facor produciviy 3. Measuring oupu 4. Measuring labour inpu 5. Measuring capial inpu 6. OECD Produciviy daabase 7. OECD Facbook 8. Conclusions 2

3 Produciviy isn everyhing bu in he long run i is almos everyhing Paul Krugman The Age of Diminishing Expecaions 3

4 1. Why is produciviy imporan? Basis for improvemens in real incomes and economic well-being: Moneary policy (inflaionary pressures) Fiscal policy (financing of healh, educaion, welfare) Slow produciviy growh = conflicing demands for disribuion of income more likely 4

5 2. Conceps: labour produciviy Every measure of produciviy is a raio beween oupu and inpu(s) Simples and mos frequenly-encounered measure: labour produciviy: Labour produciviy (LP) = Indicaes how efficienly labour is used in producion No necessarily an indicaor of effor per worker Q L 5

6 Table of produciviy measures Type of oupu measure: Gross oupu Type of inpu measure Labour Capial Capial & labour Labour produciviy (based on gross oupu) Capial produciviy (based on gross oupu) Capial - labour MFP (based on gross oupu) Capial, labour & inermediae inpus (energy, maerials, services) KLEMS muli-facor produciviy Value-added Labour produciviy (based on valueadded) Capial produciviy (based on valueadded) Capial labour MFP (based on value-added) - Single facor produciviy measures Muli-facor produciviy (MFP) measures 6

7 2. Conceps: muli-facor produciviy Raio of oupu and combined capial and labour inpu Muli facor produciviy (MFP) = Q F(L, K) Indicaes how efficienly combined labour and capial are used in producion When measured as rae of change: Cos share of labour Q ln Q = s L ln L + s K ln K + A ln A 1 L 1 K 1 1 Cos share of capial % change in oupu % change in labour inpu % change in capial inpu % change in MFP 7

8 8 MFP and labour produciviy Useful ool decomposiion of labour produciviy + = L 1 1 A A ln L L ln K K ln ) s (1 L L ln Q Q ln % change labour produciviy Effec of capial inensiy Effec of MFP

9 MFP and labour produciviy Decomposiion of labour produciviy imporan: Is labour produciviy driven by invesmen in radiional capial (--> rise in capial inensiy)? Is labour produciviy driven by invesmen in inangible capial, i.e., innovaion, organisaional change, R&D (--> change in MFP) Example: Canada 9

10 Decomposiion of labour produciviy, Canada 10

11 MFP framework 11

12 MFP framework: measuremen issues Tricky areas: -Implici pricing -Non-marke services -Qualiy change 12

13 Measuring oupu: 3 ricky areas 1) Oupu measures for indusries where here is implici pricing so ha even nominal oupu measures are debaed: Banking (FISIM, how o deal wih new financial insrumens and risk?) Insurance (how o deal wih caasrophes?) OECD Taskforce recommends o measure insurance oupu as premiums minus expeced claims, no acual claims Oherwise sharp drop in oupu when here is a caasrophe 13

14 Measuring oupu: 3 ricky areas 2) Oupu measures for indusries where echnology moves fas and where rapid qualiy change makes price measuremen difficul Example ICT: compuer producion, communicaion services 3) Oupu measures for indusries wih non-marke producers Tradiionally from inpu side Bu increasingly demand for oupu-based measures Akinson Repor UK 14

15 Measuring oupu: 3 ricky areas Char 5. Real value added per employed person in he healh and social work indusry Indices, 1982=100 France Ialy Japan Unied Saes Source: OECD. 15

16 Muli-facor produciviy framework: measuremen issues Comparabiliy of GDP growh raes: -Non-marke services -High-ech indusries Measuring user coss Spliing mixed income 16

17 Muli-facor produciviy framework: measuremen issues Comparabiliy of GDP growh raes: -Non-marke services -High-ech indusries -Measuring user coss -Spliing mixed income -Hours acually worked -Hours worked by occupaion/skill -Capial measures by indusry 17

18 4. Measuring labour inpu Ideal measure: oal number of hours worked, broken down by ype of labour inpu Number of persons employed or number of jobs can generae biased measures of produciviy if hours per person change or if here are muliple job holdings Toal hours should comprise he hours of employees, he hours of self-employed and he hours of unpaid workers (e.g. family members in agriculure) 18

19 Source: INSEE. Example: impac of differen measures of labour inpu on labour produciviy, France Indusry (mining, manufacuring and consrucion) Marke services Value-added per hour: 3.7% per year Value added per hour: 1.8% per year Value-added per employee (headcoun): 3.3% per year Value-added per person employed (headcoun): 3.4% per year Value-added per fullime equivalen person: 3.4% per year Value-added per person employed (headcoun): 1.3% per year Value-added per employee (headcoun): 1.0% per year Value-added per fullime equivalen person: 1.5% per year *Oupu is measured as a quaniy index of value-added. 19

20 Labour inpu: saisical issues 1) Two main saisical sources for hours worked: Labour force surveys (LFS) Esablishmen or firm-based surveys (ES) Resuls are no normally consisen Imporan role for naional accounans: Bring ogeher hese sources and provide labour inpu measures by indusry (and secor) ha are consisen wih oupu measures 20

21 Labour inpu: saisical issues 2) Spliing mixed income: Imporan for produciviy measuremen: how big is labour income? To dae: crude approximaions are made Naional accouns could help by puing forward higher qualiy esimaes 3) Informaion on composiion of hours worked and relaive remuneraion: Wha is skill composiion of hours? Wha is he wage difference beween 21

22 5. Measuring capial inpu Concepually correc measure: capial services (Theory see Griliches, Jorgenson, Diewer) Capial services = flow of producive services ha capial delivers in producion Measuremen assumpion: capial services = fixed proporion of producive capial sock 22

23 Producive capial sock of a paricular asse ype K = I + h 1 I + h I h T I T Pas invesmen Efficiency and reiremen parameer 23

24 Capial services of a paricular asse ype Growh of capial services of a paricular asse ype = Growh of producive sock of his asse ype ln S S = ln K K 1 1 because S = λk Normally assumed as consan 24

25 Price of capial service = user coss How much would he owner of a capial good charge in a compeiive marke o ren he capial good ou for one period (Diewer 1974)? u = ( r ) + δ i p Rae of asse price change Renal price or user cos Required rae or reurn Rae of depreciaion 25

26 Price and quaniy of capial services Value of capial services for asse i = i i u S User coss and he rae of capial service for each asse ype are brough ogeher o form an index of overall capial inpu = he rae of change of oal capial services K ln K ln K = i w 1 i i 1 Ki Average share of each asse in oal value of capial services 26

27 Capial services and ne capial sock, Ausralia 27

28 Capial services and naional accouns Capial services are differen from ne and gross capial sock Bu differen does no mean unrelaed Desirable: consisen eniy of Ne capial sock and balance shees Producive sock and capial services Consumpion of fixed capial (=depreciaion) This is one imporan opic of SNA revision, discussed nex week in Canberra by Canberra II Group 28

29 Capial services and naional accouns Some measuremen issues: Availabiliy and qualiy of invesmen series Breakdown by ype of asse imporan Scope of asses Invesmen deflaors 29

30 6. OECD Produciviy daabase Since March 2004, OECD produciviy daa available on he inerne: Produciviy:Saisics Poral For oal economy: Growh of GDP, hours worked and capial services Labour produciviy growh MFP growh Labour produciviy levels 30

31 Average raes of MFP growh 31 Denmark Japan Belgium Sweden Germany Neherlands Unied Kingdom Canada Unied Saes France Porugal Ausralia Greece Finland Ireland Ialy % change per year

32 7. OECD Facbook Since las week: OECD Facbook Online version is freely available a hp://new.sourceoecd.org/facbook and enables he downloading of he daa underlying he ables and graphs Firs compilaion of economic, social and environmen indicaors across OECD counries Chaper on macro-economic indicaors includes produciviy comparisons, in paricular MFP growh raes 32

33 8. Conclusions Produciviy is a key indicaor for analysis of economic growh --> significan demand from policy makers Simple raio bu someimes difficul o measure Desirable: close inegraion of produciviy measures and heir ingrediens wih he naional accouns Release of official produciviy saisics by saisical agencies 33

34 Thank you for your aenion! 34