Advanced Search
MyIDEAS: Login to save this article or follow this journal

An Analysis of the Causes of Weak Labour Productivity Growth in Canada since 2000

Contents:

Author Info

  • Jean-Francois Arsenault

    ()

  • Andrew Sharpe

    ()

Abstract

Since 2000, business sector labour productivity growth in Canada has averaged 0.95 per cent, 0.60 percentage points below the long-term trend established over the 1973-2000 period (1.55 per cent). In the United States productivity growth has continued to be robust beyond 2000, averaging 2.60 per cent per year. This article argues that Canada’s weak productivity growth since 2000 is temporary, and mostly associated with over-hiring and the adjustment costs of moving from a labour surplus to a labour shortage economy. The concentration of weak productivity growth since 2000 in the goods sector, the sector which shouldered the brunt of the structural adjustment, gives additional credence to this explanation. Moreover, most of the increased Canada-US productivity growth gap since 2000 relates to developments south of the 49th parallel. Given that the state of the factors driving productivity growth has not deteriorated in Canada relative to the United States in recent years, it is unlikely that long-term productivity growth in Canada and the United States have decoupled. Indeed, the current widening opens more room for convergence. Future productivity growth in Canada is likely to revert to its 1973-2000 trend.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.csls.ca/ipm/16/IPM-16-arsenault-sharpe-e.pdf
Download Restriction: no

File URL: http://www.csls.ca/ipm/16/IPM-16-arsenault-sharpe-f.pdf
File Function: version en français
Download Restriction: no

Bibliographic Info

Article provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.

Volume (Year): 16 (2008)
Issue (Month): (Spring)
Pages: 14-39

as in new window
Handle: RePEc:sls:ipmsls:v:16:y:2008:2

Contact details of provider:
Postal: 151 Slater Street, Suite 710, Ottawa, ON K1P 5H3
Phone: 613-233-8891
Fax: 613-233-8250
Email:
Web page: http://www.csls.ca/
More information through EDIRC

Order Information:
Email:
Web: http://www.csls.ca

Related research

Keywords: Canada; Labour Productivity; Economic Growth; Inter-industry shifts; labour demographics.;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Diewert, Erwin, 2008. "Changes in the Terms of Trade and Canada's Productivity Performance," Economics working papers diewert-08-03-11-11-03-49, Vancouver School of Economics, revised 18 Jul 2008.
  2. Andrew Sharpe & Celeste Bradley, 2009. "A Detailed Analysis of the Productivity Performance of Mining in Canada," CSLS Research Reports 2009-07, Centre for the Study of Living Standards.
  3. Ravi Balakrishnan, 2008. "Canadian Firm and Job Dynamics," IMF Working Papers 08/31, International Monetary Fund.
  4. Andrew Sharpe, 2003. "Why are Americans More Productive than Canadians?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 6, pages 19-37, Spring.
  5. Jack M. Mintz, 2007. "2007 Tax Competitiveness Report: A Call for Comprehensive Tax Reform," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 254, September.
  6. Jianmin Tang & Weimin Wang, 2004. "Sources of aggregate labour productivity growth in Canada and the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 37(2), pages 421-444, May.
  7. 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.
  8. Andrew Sharpe & Jean-François Arsenault & Simon Lapointe, 2008. "Apprenticeship Issues and Challenges Facing Canadian Manufacturing Industries," CSLS Research Reports 2008-02, Centre for the Study of Living Standards.
  9. Danny Leung, 2004. "The Effect of Adjustment Costs and Organizational Change on Productivity in Canada: Evidence from Aggregate Data," Working Papers 04-1, Bank of Canada.
  10. 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.
  11. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
  12. Andrew Sharpe, 2007. "Three Policies to Improve Productivity Growth in Canada," CSLS Research Reports 2007-05, Centre for the Study of Living Standards.
  13. 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.
  14. Paul Boothe & Richard Roy, 2008. "Business Sector Productivity in Canada: What Do We Know?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 16, pages 3-13, Spring.
  15. Richard Dion, 2007. "Interpreting Canada's Productivity Performance in the Past Decade: Lessons from Recent Research," Bank of Canada Review, Bank of Canada, vol. 2007(Summer), pages 19-32.
  16. Jianmin Tang & Carolyn MacLeod, 2006. "Labour force ageing and productivity performance in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 39(2), pages 582-603, May.
  17. 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.
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 in new window

Cited by:
  1. Andrew Sharpe & Alexander Murray, 2011. "State of the Evidence on Health as a Determinant of Productivity," CSLS Research Reports 2011-04, Centre for the Study of Living Standards.
  2. Chris Ross & Alexander Murray, 2010. "Aggregate Measures of Income and Output in Canada and the United States: Implications for Productivity and Living Standards," International Productivity Monitor, Centre for the Study of Living Standards, vol. 19, pages 20-39, Spring.
  3. 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.
  4. 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.
  5. Andrew Sharpe & Jean-Francois Arsenault & Peter Harrison, 2008. "Why Have Real Wages Lagged Labour Productivity Growth in Canada?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 17, pages 16-27, Fall.
  6. John E. Tilton, 2013. "Cyclical and Secular Determinants of Productivity in the Copper, Aluminum, Iron Ore, and Coal Industries," Working Papers 2013-11, Colorado School of Mines, Division of Economics and Business.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:sls:ipmsls:v:16:y:2008:2. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Whitney Hamilton) The email address of this maintainer does not seem to be valid anymore. Please ask Whitney Hamilton to update the entry or send us the correct address.

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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