The living standards in Canada, defined as real GDP per capita, declined relative to those in the United States in the 1990s. A key challenge facing Canadians is the reversal of this situation. In this article, Andrew Sharpe of the Centre for the Study of Living Standards develops a framework for the analysis of living standards and outlines a strategy to raise living standards. Sharpe first examines trends in and determinants of living standards in Canada. He finds that over the 1946-2001 period productivity growth accounted for all the growth in living standards. Large declines in average hours worked reduced living standard growth, but increased labour force participation and a more favourable demographic structure made a positive contribution. Sharpe notes that living standards could be increased by lower unemployment, greater labour force participation, and longer working time, but points out that there is little scope for long-term improvement from these sources. Rather, he argues, productivity growth represents the only sustained avenue for living standards growth. With our level of aggregate labour productivity 16 per cent below the US level, Canada has the potential to reduce much of the productivity gap with the United States and possibly even to eliminate it completely. Such a development would allow Canadians to achieve US levels of real GDP pr capita, or if they so chose, to take the productivity gains in the form of increased leisure.
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Find related papers by JEL classification: O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends and Forecasts
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.:
Andrew Sharpe, 2002.
"Productivity Concepts, Trends And Prospects: An Overview,"
The Review of Economic Performance and Social Progress,
in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Di (ed.), The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity, volume 2
Centre for the Study of Living Standards & The Institutute for Research on Public Policy.
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