International comparisons of labor costs in manufacturing
AbstractThis paper presents a comparative study of the level of unit labor costs in the manufacturing sectors of several countries. The paper begins by surveying earlier estimates of relative productivity and unit labor cost levels and evaluating the various methodologies that have been used in previous studies. Empirical estimates of the levels of foreign unit labor costs in dollars are derived based on labor compensation translated into dollars at nominal exchange rates and labor productivity translated into dollars at purchasing power parity exchange rates. These estimates are compared with results obtained in earlier studies. The results show that the level of unit labor costs in the United States has fluctuated significantly in recent years, predominantly with fluctuations in the nominal exchange rate. As of early 1988, unit labor costs in the United States had dropped well below the average level of other industrialized countries but were significantly above the level in a representative newly industrialized country, Korea.
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Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series International Finance Discussion Papers with number 330.
Date of creation: 1988
Date of revision:
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- Peter Hill, 1984. "Real Gross Product in OECD Countries and Associated Purchasing Power Parities," OECD Economics Department Working Papers 17, OECD Publishing.
- Kravis, Irving B, 1976. "A Survey of International Comparisons of Productivity," Economic Journal, Royal Economic Society, vol. 86(341), pages 1-44, March.
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- A.D. Roy, 1982. "Labour Productivity in 1980: an International Comparison," National Institute Economic Review, National Institute of Economic and Social Research, vol. 101(1), pages 26-37, August.
- Bergson, Abram, 1987. "Comparative Productivity: The USSR, Eastern Europe, and the West," American Economic Review, American Economic Association, vol. 77(3), pages 342-57, June.
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