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A Quality Adjusted Measure of Labour Services for Ireland

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  • Mary J. Keeney

    (Central Bank and Financial Services Authority of Ireland)

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    Abstract

    This paper presents annual indices of labour input adjusted for the age, education and gender distributions of the Irish workforce for the period 1999-2008. Growth in labour services is divided between the increase in hours and improvement in the productive quality of these hours. Improvement in labour quality, as proxied by education, age and gender, has added on average 0.7 percentage points per year to the growth rate in total labour input. Changes in education account for two-thirds of the improvement in labour quality, with gender and age distributions equally sharing the remaining third. Even in the face of declining total employment, growth in labour services remained positive in 2008 due to past investment in human capital. A key application of this quality-adjusted labour series is that a proportion of growth usually attributed to total factor productivity growth can now be accounted for as an improvement in the quality of labour input.

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    File URL: http://www.esr.ie/Vol41_2/02-Keeney.pdf
    File Function: First version, 2010
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    Bibliographic Info

    Article provided by Economic and Social Studies in its journal Economic and Social Review.

    Volume (Year): 41 (2010)
    Issue (Month): 2 ()
    Pages: 149-172

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    Handle: RePEc:eso:journl:v:41:y:2010:i:2:p:149-172

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    Web page: http://www.esr.ie

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    1. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    2. Barrett, Alan & Fitz Gerald, John & Nolan, Brian, 2000. "Earnings Inequality, Returns to Education and Immigration into Ireland," CEPR Discussion Papers 2493, C.E.P.R. Discussion Papers.
    3. Andrea Brandolini & Piero Cipollone, 2001. "Multifactor Productivity and Labour Quality in Italy, 1981-2000," Temi di discussione (Economic working papers) 422, Bank of Italy, Economic Research and International Relations Area.
    4. Mary J. Keeney, 2007. "Measuring Irish Capital," The Economic and Social Review, Economic and Social Studies, vol. 38(1), pages 25-62.
    5. Barrett, Alan & Bergin, Adele & Kelly, Elish, 2009. "Estimating the Impact of Immigration on Wages in Ireland," Papers WP318, Economic and Social Research Institute (ESRI).
    6. Guido Schwerdt & Jarkko Turunen, 2007. "Changes in Human Capital: Implications for Productivity Growth in the Euro Area," Ifo Working Paper Series Ifo Working Paper No. 53, Ifo Institute for Economic Research at the University of Munich.
    7. Alan Barrett & Seamus McGuinness & Martin O'Brien, 2008. "The Immigrant Earnings Disadvantage Across the Earnings and Skills Distributions: The Case of Immigrants from the EU's New Member States in Ireland," Papers WP236, Economic and Social Research Institute (ESRI).
    8. Alan Krueger & Mikael Lindahl, 2000. "Education for Growth: Why and For Whom?," Working Papers 808, Princeton University, Department of Economics, Industrial Relations Section..
    9. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
    10. Bergin, Adele & Kearney, Ide, 2007. "Human capital accumulation in an open labour market: Ireland in the 1990s," Economic Modelling, Elsevier, vol. 24(6), pages 839-858, November.
    11. Hamilton, Rob, 2005. "Education, Demographics and the Irish Economic Miracle," Quarterly Bulletin Articles, Central Bank of Ireland, pages 103-130, May.
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