IDEAS home Printed from https://ideas.repec.org/a/sls/ipmsls/v10y20051.html
   My bibliography  Save this article

An Analysis of the Labour Productivity Growth Slowdown in Canada since 2000

Author

Listed:
  • Someshwar Rao
  • Andrew Sharpe
  • Jeremy Smith

Abstract

After accelerating in the second half of the 1990s, aggregate labour productivity growth in Canada has fallen off significantly since 2000. This paper examines the factors behind this development, which is puzzling given the recent acceleration of productivity growth in the United States and the apparent strength of most productivity drivers in Canada. Factors that may have contributed to the post-2000 productivity growth slowdown include: the weakness of information and communications technologies (ICT) manufacturing; the slower growth of machinery and equipment (M&E) investment; slower economic growth; and higher commodity prices. But the authors argue that in recent years Canada has suffered no major macroeconomic shock (excluding exchange rate shocks) and has undergone no policy development or reorientation that would have significantly impeded productivity growth. In addition, the pick-up in U.S. productivity growth after 2000, which appears to be related to the faster pace of technological change, may augur well for a return to stronger productivity growth in this country. Yet they note that the dangers of complacency are very real. They conclude by pointing out that future trends in productivity in Canada are largely in the hands of the private sector. Nevertheless, Canadian governments can faciliatate productivity-enhancing investments by fostering a highly competitive business climate.

Suggested Citation

  • Someshwar Rao & Andrew Sharpe & Jeremy Smith, 2005. "An Analysis of the Labour Productivity Growth Slowdown in Canada since 2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 10, pages 3-23, Spring.
    • Handle: RePEc:sls:ipmsls:v:10:y:2005:1
    as

    Download full text from publisher

    File URL: http://www.csls.ca/ipm/10/rao_sharpe_smith-e.pdf
    Download Restriction: no
    File URL: http://www.csls.ca/ipm/10/rao_sharpe_smith-f.pdf
    File Function: version en français
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Surendra Gera & Wulong Gu, 2004. "The Effect of Organizational Innovation and Information and Communications Technology on Firm Performance," International Productivity Monitor, Centre for the Study of Living Standards, vol. 9, pages 37-51, Fall.
    2. Julie Turcotte & Lori Whewell Rennison, 2004. "The Link between Technology Use, Human Capital, Productivity and Wages: Firm-level Evidence," International Productivity Monitor, Centre for the Study of Living Standards, vol. 9, pages 25-36, Fall.
    3. Mun S. Ho & Dale W. Jorgenson & Kevin J. Stiroh, 2004. "Will the U.S. productivity resurgence continue?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(Dec).
    4. Andrew Sharpe, 2004. "Recent Productivity Developments in Canada and the United States: Productivity Growth Deceleration versus Acceleration," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 16-26, Spring.
    5. Someshwar Rao & Jianmin Tang & Weimin Wang, 2004. "Measuring the Canada-U.S. Productivity Gap: Industry Dimensions," International Productivity Monitor, Centre for the Study of Living Standards, vol. 9, pages 3-14, Fall.
    6. Danny Leung, 2004. "The Effect of Adjustment Costs and Organizational Change on Productivity in Canada: Evidence from Aggregate Data," International Productivity Monitor, Centre for the Study of Living Standards, vol. 9, pages 52-61, Fall.
    7. Baldwin, John R. Chowhan, James, 2003. "The Impact of Self-employment on Labour-productivity Growth: A Canada and United States Comparison," Economic Analysis (EA) Research Paper Series 2003016e, Statistics Canada, Analytical Studies Branch.
    8. Centre for the Study of Living Standards, 2004. "Report on Productivity Trends in Selected Natural Resource Industries in Canada," CSLS Research Reports 2004-06, Centre for the Study of Living Standards.
    9. Gu, Wulong Gera, Surendra, 2004. "The Effect of Organizational Innovation and Information Technology on Firm Performance," The Canadian Economy in Transition 2004007e, Statistics Canada, Economic Analysis Division.
    10. Jeremy Smith, 2004. "Assessing Aggregate Labour Productivity Trends in Canada and the United States: Total Economy versus Business Sector Perspectives," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 47-58, Spring.
    11. Kaci, Mustapha Maynard, Jean-Pierre, 2005. "Canada/U.S. Labour Productivity Revisions in the Business Sector," Economic Analysis Methodology Paper Series: National Accounts 2005003e, Statistics Canada, Economic Analysis Division.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wulong Gu, 2018. "Accounting for Slower Productivity Growth in the Canadian Business Sector after 2000: The Role of Capital Measurement Issues," International Productivity Monitor, Centre for the Study of Living Standards, vol. 34, pages 21-39, Spring.
    2. Michael-John Almon & Jianmin Tang, 2011. "Industrial Structural Change and the Post-2000 Output and Productivity Growth Slowdown: A Canada-U.S. Comparison," International Productivity Monitor, Centre for the Study of Living Standards, vol. 22, pages 44-81, Fall.
    3. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
    4. Robert Inklaar & Marcel P. Timmer & Bart Van Ark, 2007. "Mind the Gap! International Comparisons of Productivity in Services and Goods Production," German Economic Review, Verein für Socialpolitik, vol. 8(2), pages 281-307, May.
    5. Robert Inklaar & Marcel P. Timmer & Bart Van Ark, 2007. "Mind the Gap! International Comparisons of Productivity in Services and Goods Production," German Economic Review, Verein für Socialpolitik, vol. 8(2), pages 281-307, May.
    6. Mr. Marcello M. Estevão & Ms. Evridiki Tsounta, 2010. "Canada's Potential Growth: Another Victim of the Crisis?," IMF Working Papers 2010/013, International Monetary Fund.
    7. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
    3. Centre for the Study of Living Standards, 2012. "The Impact of Information and Communication Technology on the Productivity of the Canadian Transportation System: A Macroeconomic Approach for the Air and Rail Sectors," CSLS Research Reports 2012-07, Centre for the Study of Living Standards.
    4. Petr Hanel, 2007. "Productivity and innovation: an overview of the issues," Cahiers de recherche 07-22, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    5. Orozco, Luis Antonio & Sanabria, John Alirio & Sosa, Juan Camilo & Aristizabal, Jeimy & López, Liliana, 2022. "How do IT investments interact with other resources to improve innovation?," Journal of Business Research, Elsevier, vol. 144(C), pages 358-365.
    6. Rinaldo Evangelista & Maria Savona, 2010. "Innovation and Employment in Services," Chapters, in: Faïz Gallouj & Faridah Djellal (ed.), The Handbook of Innovation and Services, chapter 16, Edward Elgar Publishing.
    7. Evangelista, Rinaldo & Vezzani, Antonio, 2010. "The economic impact of technological and organizational innovations. A firm-level analysis," Research Policy, Elsevier, vol. 39(10), pages 1253-1263, December.
    8. Maria José Sousa & Miguel González-Loureiro, 2016. "Employee knowledge profiles – a mixed-research methods approach," Information Systems Frontiers, Springer, vol. 18(6), pages 1103-1117, December.
    9. Bernhard Dachs & Martin Hud & Christian Köhler & Bettina Peters, 2016. "Employment Effects of Innovations over the Business Cycle: Firm-Level Evidence from European Countries," DEM Discussion Paper Series 16-20, Department of Economics at the University of Luxembourg.
    10. Meyer, Jenny, 2007. "Older Workers and the Adoption of New Technologies," ZEW Discussion Papers 07-050, ZEW - Leibniz Centre for European Economic Research.
    11. Jasinska-Biliczak Anna & Kowal Jolanta, 2020. "Innovation Capability Development in Regional Entrepreneurship: The Case of Economies in Transition," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 6-32.
    12. MOTHE Caroline & NGUYEN Thi Thuc Uyen, 2011. "Do firms rely on sources of information for organizational innovation?," LISER Working Paper Series 2011-39, Luxembourg Institute of Socio-Economic Research (LISER).
    13. Rashid Nikzad, 2023. "Evaluation of Productivity in the Canadian Copyrightbased Industries," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 9(3), pages 273-284, July.
    14. Samoilenko, Sergey & Osei-Bryson, Kweku-Muata, 2008. "An exploration of the effects of the interaction between ICT and labor force on economic growth in transition economies," International Journal of Production Economics, Elsevier, vol. 115(2), pages 471-481, October.
    15. Platero Jaime, Manuel & Benito Hernández, Sonia & Rodríguez Duarte, Antonio, 2017. "The moderator effect of training in the adoption of ICT in microenterprises," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    16. Jerzy Rosinski, 2012. "Attitudes of the IT staff against employing organization as a challenge for the development of IT businesses (Postawy pracownikow branzy IT wobec zatrudniajacych organizacji jako wyzwanie dla rozwoju ," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 10(38), pages 229-247.
    17. Bashir, Sadaf & Matzat, U. & Sadowski, B. M., 2014. "The adoption of information and communication technologies in the design sector and their impact on firm performance: Evidence from the Dutch design sector," 25th European Regional ITS Conference, Brussels 2014 101389, International Telecommunications Society (ITS).
    18. Meyer, Jenny, 2008. "The Adoption of New Technologies and the Age Structure of the Workforce," ZEW Discussion Papers 08-045, ZEW - Leibniz Centre for European Economic Research.
    19. Ana Ferreira & Ana Lúcia Teixeira & Ana Roque Dantas, 2015. "Non-technological innovation activities mediate the impacts of the intra- and extra-organizational contexts on technological innovation outputs," Enterprise and Work Innovation Studies, Universidade Nova de Lisboa, IET/CICS.NOVA-Interdisciplinary Centre on Social Sciences, Faculty of Science and Technology, vol. 11(11), pages 9-43, December.
    20. Sandulli, Francesco D. & Baker, Paul M.A. & López-Sánchez, José I., 2013. "Can small and medium enterprises benefit from skill-biased technological change?," Journal of Business Research, Elsevier, vol. 66(10), pages 1976-1982.

    More about this item

    Keywords

    Productivity; Productivity Levels; Canada; United States; Labour Productivity; Productivity Gap; Purchasing Power Parity; Industry; Industry Level;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sls:ipmsls:v:10:y:2005:1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CSLS (email available below). General contact details of provider: https://edirc.repec.org/data/cslssca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.