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Measuring productivity

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  • Dirk Pilat
  • Paul Schreyer

Abstract

This paper discusses the main measurement issues in calculating productivity indicators, and provides guidance to researchers and statisticians in addressing these difficulties. It draws on the OECD Productivity Manual and on recent OECD work on productivity levels. The paper examines a range of issues related to the measurement of productivity growth, including the choice of output measure (gross output versus value added), the measurement of output, labour and capital input, as well as index number issues. It also discusses OECD estimates of productivity levels and the key measurement issues in deriving these estimates, including the appropriate conversion from one currency unit to another. A final section discusses the interpretation of productivity measures, including their most common applications and the possible pitfalls. The paper concludes that substantial progress has been made in recent years to improve the comparability of productivity statistics. In many countries, however, basic source data are still the key limitation to the development of comparable indicators of productivity. In addition, statisticians, researchers and policy makers need to be more aware of the appropriate uses and interpretation of productivity statistics.

Suggested Citation

  • Dirk Pilat & Paul Schreyer, 2003. "Measuring productivity," OECD Economic Studies, OECD Publishing, vol. 2001(2), pages 127-170.
  • Handle: RePEc:oec:ecokaa:5lmqcr2k2blr
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    File URL: http://dx.doi.org/10.1787/eco_studies-v2001-art13-en
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    Cited by:

    1. Aras Zirgulis, 2014. "Is International Capital Tax Competition Fueled by the Quest for Increased Productivity?," Proceedings of International Academic Conferences 0702435, International Institute of Social and Economic Sciences.
    2. Fischer, Christoph & Hossfeld, Oliver, 2014. "A consistent set of multilateral productivity approach-based indicators of price competitiveness," Discussion Papers 10/2014, Deutsche Bundesbank.
    3. Sandrine Levasseur, 2006. "Convergence and FDI in an enlarged EU: what can we learn from the experience of cohesion countries for the CEECS?," Documents de Travail de l'OFCE 2006-12, Observatoire Francais des Conjonctures Economiques (OFCE).
    4. Mumtaz, Rehma & Zaman, Khalid & Sajjad, Faiza & Lodhi, Muhammad Saeed & Irfan, Muhammad & Khan, Imran & Naseem, Imran, 2014. "Modeling the causal relationship between energy and growth factors: Journey towards sustainable development," Renewable Energy, Elsevier, vol. 63(C), pages 353-365.
    5. Federico Biagi, 2013. "ICT and Productivity: A Review of the Literature," JRC Working Papers on Digital Economy 2013-09, Joint Research Centre (Seville site).
    6. Qazi, Ahmar Qasim & Zhao, Yulin, 2013. "Indigenous R&D Effectiveness and Technology Transfer on Productivity Growth: Evidence from the Hi-Tech Industry of China," MPRA Paper 46589, University Library of Munich, Germany.
    7. Gloria O. Pasadilla & Christine Marie M. Liao, 2007. "Has Liberalization Strengthened the Link between Services and Manufacturing?," Microeconomics Working Papers 22047, East Asian Bureau of Economic Research.
    8. Peter Harrison, 2007. "Can Measurement Error Explain the Weakness of Productivity Growth in the Canadian Construction Industry?," CSLS Research Reports 2007-01, Centre for the Study of Living Standards.
    9. Qingyuan Du & Shang-Jin Wei & Peichu Xie, 2013. "Roads and the Real Exchange Rate," NBER Working Papers 19291, National Bureau of Economic Research, Inc.
    10. DragoÅŸ Mihai Ungureanu & Ruxandra Dana Vilag & George Horia Ionescu & Florian Bogdan Stoian, 2009. "ROMANIA'S REAL CONVERGENCE TO THE EUROPEAN UNION Dragos Mihai Ungureanu , Permanent Representation of Romania to the European Union Ruxandra Dana Vilag, Romanian-American University Bucharest George H," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(11), pages 1-14.
    11. Iancu, Aurel, 2009. "Real Economic Convergence," Working Papers of National Institute of Economic Research 090104, National Institute of Economic Research.
    12. Torre Cepeda, Leonardo E. & Ramos, Luis Fernando Colunga, 2015. "Patterns of TFP growth in Mexico: 1991–2011," The North American Journal of Economics and Finance, Elsevier, vol. 34(C), pages 398-420.
    13. Fischer, Christoph & Hossfeld, Oliver, 2014. "A consistent set of multilateral productivity approach-based indicators of price competitiveness – Results for Pacific Rim economies," Journal of International Money and Finance, Elsevier, vol. 49(PA), pages 152-169.
    14. François Magnien & Jean-Luc Tavernier & David Thesmar, 2002. "Le recul du PIB par habitant de la France traduit surtout l'imperfection des comparaisons internationales," Économie et Statistique, Programme National Persée, vol. 354(1), pages 3-20.
    15. Dirk Pilat, 2001. "Productivity Growth in the OECD Area: Some Recent Findings," International Productivity Monitor, Centre for the Study of Living Standards, vol. 3, pages 32-44, Fall.
    16. Michael J. Harper & Alice O. Nakamura & Lu Zhang, 2012. "Difficulties Assessing Multifactor Productivity for Canada," International Productivity Monitor, Centre for the Study of Living Standards, vol. 24, pages 76-84, Fall.
    17. Dirk Pilat & Paul Schreyer, 2004. "The OECD Productivity Database: An Overview," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 59-65, Spring.
    18. Werner Hölzl & Robert Leisch, 2004. "Estimates of capital stocks and capital productivity in Austrian manufacturing industries, 1978 -1994," Working Papers geewp41, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    19. Jacques-Bernard Sauner-Leroy, 2003. "The impact of the implementation of the Single Market Programme on productive efficiency and on mark-ups in the European Union manufacturing industry," European Economy - Economic Papers 2008 - 2015 192, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    20. Gilbert Cette, 2005. "Are Productivity Levels Higher in Some European Countries than in the United States?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 10, pages 59-68, Spring.
    21. Ohnemus, Jörg, 2007. "Does IT Outsourcing Increase Firm Success? An Empirical Assessment using Firm-Level Data," ZEW Discussion Papers 07-087, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    22. Aras Zirgulis, 2014. "Is International Capital Tax Competition Fueled by the Quest for Increased Productivity?," International Journal of Economic Sciences, University of Economics, Prague, vol. 2014(4), pages 99-116.
    23. Torre Cepeda Leonardo E. & Colunga Ramos Luis Fernando, 2015. "Patterns of Total Factor Productivity Growth in Mexico: 1991-2011," Working Papers 2015-24, Banco de México.
    24. Alessandra Colecchia & Paul Schreyer, 2002. "ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? A Comparative Study of Nine OECD Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 408-442, April.

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