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Measuring the Canada-U.S. Productivity Gap: Industry Dimensions

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Author Info

  • Someshwar Rao

    ()

  • Jianmin Tang

    ()

  • Weimin Wang

    ()

Abstract

A key objective of economic policy in Canada is to reduce the productivity gap with the United States. The development of appropriate policies to attain this goal requires a thorough understanding of the nature of the gap, including its industry dimensions. Unfortunately, statistical agencies do not currently produce estimates of Canada-U.S. productivity gaps by industry. To fill this data lacuna, Someshwar Rao, Jianmin Tang, and Weimin Wang of Industry Canada in the first article present benchmark estimates of the Canada-U.S. labour productivity and total factor productvity gap for 29 industries for 1999 and extend the industry estimates back to 1997 and forward to 2001. They report that in 2001 output per hour in the business sector in Canada was 82 per cent and total factor productivity was 87 per cent of the U.S. level. Lower capital intensity was responsible for about 30 per cent of the business sector labour productivity gap. Three of four major sectors in Canada had a labour productivity level below its U.S. counterpart – manufacturing (80 per cent), the service sector (81 per cent), and primary industries (87 per cent) – while the level of labour producivity in the construction industry was well above that in the United States (129 per cent). Within manufacturing, the largest productivity gaps were found in electronic and electrical products, fabricated metal, and machinery and computers. Within the service sector, finance, insurance and real estate and information and cultural industries had particularly large productivity gaps. In contrast, labour productivity levels in a number of Canadian natural resource industries exceeded U.S. levels.

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Bibliographic Info

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

Volume (Year): 9 (2004)
Issue (Month): (Fall)
Pages: 3-14

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Handle: RePEc:sls:ipmsls:v:9:y:2004:1

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Related research

Keywords: Productivity; Productivity Levels; Canada; United States; Productivity Gap; Purchasing Power Parity; Industry; Industry Level;

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Citations

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Cited by:
  1. Simona E. Cociuba & Alexander Ueberfeldt, 2008. "Driving forces of the Canadian economy: an accounting exercise," Globalization and Monetary Policy Institute Working Paper 06, Federal Reserve Bank of Dallas.
  2. Pamfili Antipa & Marie-Elisabeth de la Serve, 2010. "International Comparisons of Industry-based Productivity Levels in the Financial and Business Service Sectors," International Productivity Monitor, Centre for the Study of Living Standards, vol. 19, pages 66-81, Spring.
  3. Andrew Sharpe, 2005. "What Explains the Canada-US ICT Investment Gap?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 11, pages 21-38, Fall.
  4. 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.
  5. Andrew Sharpe, 2007. "Lessons for Canada from International Productivity Experience," International Productivity Monitor, Centre for the Study of Living Standards, vol. 14, pages 20-37, Spring.
  6. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
  7. Grady, Patrick, 2010. "Immigration and the Growing Canada-U.S. Productivity Gap," MPRA Paper 27454, University Library of Munich, Germany.
  8. Andrew Sharpe, 2004. "Ten Productivity Puzzles Facing Researchers," International Productivity Monitor, Centre for the Study of Living Standards, vol. 9, pages 15-24, Fall.
  9. Michelle Alexopoulos & Jon Cohen, 2012. "The Effects of Computer Technologies on the Canadian Economy: Evidence from New Direct Measures," International Productivity Monitor, Centre for the Study of Living Standards, vol. 23, pages 17-32, Spring.
  10. Matt Kellison, 2004. "The McKinsey Global Institute Productivity Studies: Lessons for Canada," CSLS Research Reports 2004-10, Centre for the Study of Living Standards.

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