Comparing Labour Productivity Growth in the OECD Area: The Role of Measurement

OECD STI Working Paper No. 2003/14

46 Pages Posted: 13 Oct 2010

See all articles by Nadim Ahmad

Nadim Ahmad

Organization for Economic Co-Operation and Development (OECD)

François Lequiller

affiliation not provided to SSRN

Pascal Marianna

Organization for Economic Co-Operation and Development (OECD)

Dirk Pilat

OECD

Paul Schreyer

Organization for Economic Co-Operation and Development (OECD) - National Accounts and Structural Economic Statistics Division

Anita Wölfl

Organization for Economic Co-Operation and Development - Economics Department

Date Written: December 12, 2003

Abstract

This paper examines how measurement problems affect international comparisons of labour productivity. It suggests that these measurement problems do not significantly affect the assessment of aggregate productivity patterns in the OECD area. However, these problems do influence the more detailed assessment of productivity growth, notably the role of specific sectors and demand components in aggregate performance. The paper shows that there are only a few significant problems regarding the comparability of nominal GDP across OECD countries, the most important being the treatment of software investment. In most cases, efforts are underway to reduce the size of these differences. Measurement differences for real GDP are also important, although several of these factors have impacts that work in different directions. Moreover, several of these problems primarily affect the distribution of total GDP across different expenditure categories and across different activities, not necessarily GDP growth. The measurement of labour input is the third major factor affecting labour productivity estimates. A key challenge in deriving comparisons of productivity growth across OECD countries lies in ensuring that estimates of labour input are consistent with the GDP information and that the components of labour input, hours worked and employment are internally consistent. The paper shows that a careful assessment of available data and their underlying concepts is often equally important for developing accurate estimates of labour productivity growth as cross-country differences in the underlying basic data. To address this problem, OECD is currently developing a reference database on productivity at the aggregate level.

Suggested Citation

Ahmad, Nadim and Lequiller, François and Marianna, Pascal and Pilat, Dirk and Schreyer, Paul and Wölfl, Anita, Comparing Labour Productivity Growth in the OECD Area: The Role of Measurement (December 12, 2003). OECD STI Working Paper No. 2003/14, Available at SSRN: https://ssrn.com/abstract=1690929 or http://dx.doi.org/10.2139/ssrn.1690929

Nadim Ahmad (Contact Author)

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

François Lequiller

affiliation not provided to SSRN

No Address Available

Pascal Marianna

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Dirk Pilat

OECD ( email )

Paris
France

Paul Schreyer

Organization for Economic Co-Operation and Development (OECD) - National Accounts and Structural Economic Statistics Division ( email )

Paris
France

Anita Wölfl

Organization for Economic Co-Operation and Development - Economics Department ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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