Long-Term Productivity Growth in Canada and the United States

Canadian Productivity Review Research Paper No. 13

21 Pages Posted: 18 Nov 2009

See all articles by John R. Baldwin

John R. Baldwin

Statistics Canada - Microeconomic Analysis Division

Wulong Gu

Government of Canada - Micro-Economic Analysis Division

Date Written: August 28, 2007

Abstract

This paper compares long-run growth in labour productivity in Canada and the United States from 1961 to 2006. Over the entire period labour productivity in both countries grew at about the same rate. But Canadian growth exceeded that of the United States up to the early 1980s. Since then, U.S. labour productivity growth has exceeded Canadian growth. The gap has widened, particularly after 2000. The paper also decomposes labour productivity growth into three components - that arising from increases in capital intensity, from increases in the skill level of the labour force (due to changes in labour composition) and a residual (multifactor productivity growth). The first two components (both arising from investment, one in machinery and structures, the other in training) were more important in Canada. The third (the residual often referred to as technological progress) was larger in the United States.

Keywords: Productivity, investment, technological progress, skill upgrading

JEL Classification: D24, J24, O47, O3, Q55

Suggested Citation

Baldwin, John R. and Gu, Wulong, Long-Term Productivity Growth in Canada and the United States (August 28, 2007). Canadian Productivity Review Research Paper No. 13, Available at SSRN: https://ssrn.com/abstract=1507872 or http://dx.doi.org/10.2139/ssrn.1507872

John R. Baldwin

Statistics Canada - Microeconomic Analysis Division ( email )

24 Floor - R.H.Coats Building
Tunney's Pasture
Ottawa, Ontaria K1A 0T6
Canada
613-951-8588 (Phone)
613-951-5403 (Fax)

Wulong Gu (Contact Author)

Government of Canada - Micro-Economic Analysis Division ( email )

24 Floor - R.H.Coats Building
Tunney's Pasture
Ottawa, Ontaria K1A 0T6
Canada

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