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Sources of aggregate labour productivity growth in Canada and the United States

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  • Jianmin Tang
  • Weimin Wang

Abstract

In this paper we propose a decomposition technique to examine the sources of industrial contribution to aggregate labour productivity growth. We show that in terms of pure labour productivity growth, the manufacturing and service sectors contributed equally to the aggregate Canada-U.S. labour productivity growth gap during the 1987-98 period. But, in terms of total industrial contributions, which also take into account the contributions from a change in relative size, the service sector was the largest contributor. We also find that high labour productivity growth industries did not attract resources from stagnant industries - a phenomenon consistent with Baumol's cost disease of stagnant industries.

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Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 37 (2004)
Issue (Month): 2 (May)
Pages: 421-444

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Handle: RePEc:cje:issued:v:37:y:2004:i:2:p:421-444

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Cited by:
  1. Alicia García-Herrero & Josep M. Vilarrubia, 2007. "The Laffer Curve of Macroeconomic Volatility and Growth: Can it be Explained by the Different Nature of Crises?," Money Affairs, Centro de Estudios Monetarios Latinoamericanos, vol. 0(1), pages 43-60, January-J.
  2. Jeremy Smith, 2004. "Aggregate Labour Productivity Growth in Canada and the United States: Definitions, Trends and Measurement Issues," CSLS Research Reports 2004-04, Centre for the Study of Living Standards.
  3. Ricardo de Avillez, 2011. "A Detailed Analysis of the Productivity Performance of the Canadian Primary Agriculture Sector," CSLS Research Reports 2011-06, Centre for the Study of Living Standards.
  4. Andrew Sharpe & Eric Thomson, 2010. "Insights into Canada’s Abysmal Post-2000 Productivity Performance from Decompositions of Labour Productivity Growth by Industry and Province," International Productivity Monitor, Centre for the Study of Living Standards, vol. 20, pages 48-67, Fall.
  5. Dumagan, Jesus C., 2013. "Relative Price Effects on Decompositions of Change in Aggregate Labor Productivity," Discussion Papers DP 2013-44, Philippine Institute for Development Studies.
  6. Chris Ross, 2011. "A Detailed Analysis of the Productivity Performance of the Canadian Food Manufacturing Subsector," CSLS Research Reports 2011-07, Centre for the Study of Living Standards.
  7. Dumagan, Jesus C., 2011. "A Generalized Exactly Additive Decomposition of Aggregate Labor Productivity Growth," Discussion Papers DP 2011-19, Philippine Institute for Development Studies.
  8. Duo Qin, 2010. "Long-term Nexus of Industrial Pollution and Income in China," Working Papers 659, Queen Mary, University of London, School of Economics and Finance.
  9. Jason Allen & Walter Engert & Ying Liu, 2006. "Are Canadian Banks Efficient? A Canada--U.S. Comparison," Working Papers 06-33, Bank of Canada.
  10. Dumagan, Jesus C., 2012. "Consistent GDP Aggregation and Purchasing Power Parity," Discussion Papers DP 2012-02, Philippine Institute for Development Studies.
  11. Ricardo de Avillez, 2012. "Sectoral Contributions to Labour Productivity Growth in Canada: Does the Choice of Decomposition Formula Matter?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 24, pages 97-117, Fall.
  12. Jason Allen & Walter Engert & Ying Liu, 2007. "A Comparison of Canadian and US Universal Banks: Efficiency, Productivity, and the Role of Technology," Money Affairs, Centro de Estudios Monetarios Latinoamericanos, vol. 0(1), pages 61-96, January-J.
  13. Jean-Francois Arsenault & Andrew Sharpe, 2008. "An Analysis of the Causes of Weak Labour Productivity Growth in Canada since 2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 16, pages 14-39, Spring.
  14. Diewert, Erwin, 2008. "On the Tang and Wang Decomposition of Labour Productivity Growth into Sectoral Effects," Economics working papers erwin_diewert-2008-6, Vancouver School of Economics, revised 16 Apr 2008.
  15. Prosper F. Bangwayo-Skeete & Ryan W. Skeete, 2007. "Regional Integration and Elasticities of Export Demand in Barbados," Money Affairs, Centro de Estudios Monetarios Latinoamericanos, vol. 0(1), pages 23-41, January-J.
  16. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
  17. Andrew Sharpe, 2010. "Can Sectoral Reallocations of Labour Explain Canada’s Absymal Productivity Performance?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 19, pages 40-49, Spring.
  18. Prudence Serju, 2007. "Estimating Potential Output for Jamaica: a Structural VAR Approach," Money Affairs, Centro de Estudios Monetarios Latinoamericanos, vol. 0(1), pages 1-22, January-J.
  19. Ricardo de Avillez, 2013. "Sectoral Contributions to Labour Productivity Growth: Does the Choice of Decomposition Formula Matter?," CSLS Research Reports 2012-09, Centre for the Study of Living Standards.
  20. Someshwar Rao & Andrew Sharpe & Jianmin Tang, 2004. "Productivity Growth in Service Industries: A Canadian Success Story," CSLS Research Reports 2004-01, Centre for the Study of Living Standards.

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