The Early 21st Century U.S. Productivity Expansion is Still in Services
AbstractLabour productivity in the U.S. non-farm business sector grew two and a half per cent per year during the 1995-2005 period, nearly double its growth rate over the previous two decades. Services sector labour productivity (LP) and multifactor productivity (MFP) grew more rapidly and substantially exceeded productivity accelerations in the goods sector. We show that the services sector accounted for three-quarters of U.S. MFP growth after 1995, and within services the contribution of MFP to LP growth exceeded the vaunted contribution of IT investment. We also find that the services sector has become even more important as the primary source of sustained productivity growth after 2000. In this study, we compute LP, MFP and contributions to growth accounts for 57 industries within the goods and services sectors, using the new NAICS-based data set. We also show that resource reallocations, which are a newly important factor in productivity analysis, have changed the relation between increases in industry productivity growth rates and aggregate and sector growth rates in surprising ways.
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Bibliographic InfoArticle provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.
Volume (Year): 14 (2007)
Issue (Month): (Spring)
Find related papers by JEL classification:
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- F00 - International Economics - - General - - - General
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O25 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
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