Historically, per capita income in the United States has exceeded those in Canada and this difference has reflected higher labour productivity levels south of the 49th parallel. In this article, Andrew Sharpe of the Centre for the Study of Living Standards provides estimates of the size of the gap in aggregate labour productivity between the United States and Canada and discuss possible explanation of the gap. He points out that based on average weekly hours estimates from the U.S. household survey, total economy output per hour in Canada in 2002 was 89 per cent of the U.S. level, compared to 81 per cent using estimates from the establishment survey. Sharpe concludes that the Canada-U.S. aggregate labour productivity gap reflects Canada's lower capital intensity of production, an innovation gap manifested by lower R&D expenditure, a smaller and less dynamic high tech sector, less developed human capital at the top end of the labour market, and more limited economies of scale and scope.
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Find related papers by JEL classification: O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
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.:
Robert E. Hall & Charles I. Jones, 1996.
"The Productivity of Nations,"
NBER Working Papers
5812, National Bureau of Economic Research, Inc.
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