The Productivity Differential Between the Canadian and U.S. Manufacturing Sectors: A Perspective Drawn from the Early 20th Century
AbstractMany historical comparisons of international productivity use measures of labour productivity (output per worker). Differences in labour productivity can be caused by differences in technical efficiency or differences in capital intensity. Moving to measures of total factor productivity allows international comparisons to ascertain whether differences in labour productivity arise from differences in efficiency or differences in factors utilized in the production process. This paper examines differences in output per worker in the manufacturing sectors of Canada and the United States in 1929 and the extent to which it arises from efficiency differences. It makes corrections for differences in capital and materials intensity per worker in order to derive a measure of total factor efficiency of Canada relative to the United States, using detailed industry data. It finds that while output per worker in Canada was only about 75% of the United States productivity level, the total factor productivity measure of Canada was about the same as the United States level - that is, there was very little difference in technical efficiency in the two countries. Canada's lower output per worker was the result of the use of less capital and materials per worker than the United States.
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Bibliographic InfoPaper provided by Statistics Canada, Economic Analysis Division in its series The Canadian Productivity Review with number 2008022e.
Date of creation: 23 Dec 2008
Date of revision:
Manufacturing; Economic accounts; Productivity accounts;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-10 (All new papers)
- NEP-BEC-2009-01-10 (Business Economics)
- NEP-EFF-2009-01-10 (Efficiency & Productivity)
- NEP-HIS-2009-01-10 (Business, Economic & Financial History)
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- Michael Hinton, 2011. "Was Canadian Manufacturing Inefficient before WWI? The Case of the Cotton Textile Industry, 1870-1910," Working Paper Series 44_11, The Rimini Centre for Economic Analysis.
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