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Labour or Total Factor Productivity: Do We Need to Choose?

Author

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  • Timothy C. Sargent

    ()

  • Edgard R. Rodriguez

Abstract

. In this article, as part of the symposium on total factor productivity, Timothy C. Sargent and Edgard R. Rodriquez of Finance Canada discuss the issue of the choice between labour and total factor productivity. They conclude that both measures have uses. For periods of less than a decade, labour productivity is the preferred measure, but for longer periods total factor productivity is superior. When capital stock estimates are of poor quality, it is better to use labour productivity.

Suggested Citation

  • Timothy C. Sargent & Edgard R. Rodriguez, 2000. "Labour or Total Factor Productivity: Do We Need to Choose?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 1, pages 41-44, Fall.
  • Handle: RePEc:sls:ipmsls:v:1:y:2000:7
    as

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    References listed on IDEAS

    as
    1. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," Review of Economic Studies, Oxford University Press, vol. 34(3), pages 249-283.
    2. Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997. "Long-Run Implications of Investment-Specific Technological Change," American Economic Review, American Economic Association, vol. 87(3), pages 342-362, June.
    3. Charles R. Hulten, 2000. "Total Factor Productivity: A Short Biography," NBER Working Papers 7471, National Bureau of Economic Research, Inc.
    4. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
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    Citations

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    Cited by:

    1. D. Roderick Kiewiet, 2016. "What’s Right, and What’s Wrong, with “What is Wrong with the West’s Economies?” by Edmund Phelps," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 33(1), pages 11-18, August.
    2. Carlo Bernini Carri, 2005. "Productivity Growth and Convergence between Agriculture and Industry in EU Countries," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, November.
    3. Mohamed Amara & Khaled Thabet, 2016. "Firm and Regional Factors of Productivity: A Multilevel Analysis of Tunisian Manufacturing," Working Papers 1041, Economic Research Forum, revised 09 Jan 2016.
    4. Laura Hospido & Eva Moreno-Galbis, 2015. "The Spanish productivity puzzle in the Great Recession," Working Papers 1501, Banco de España;Working Papers Homepage.
    5. Mohamed Amara & AbdelRahmen El Lahga, 2015. "A note on MAR and Jacobs externalities in the Tunisian manufacturing industries," Letters in Spatial and Resource Sciences, Springer, vol. 8(2), pages 151-167, July.
    6. Andreas, Eder & Bernhard, Mahlberg & Bernhard, Stürmer, 2017. "Measuring and explaining productivity growth of renewable energy producers: An empirical study of Austrian biogas plants," MPRA Paper 79826, University Library of Munich, Germany.
    7. Bjuggren, Carl Magnus, 2013. "The Effect of Employment Protection Rules on Firm Productivity - A Natural Experiment," HUI Working Papers 82, HUI Research, revised 30 Oct 2013.
    8. Erdal Atukeren, 2005. "R&D Races and Spillovers between the EU and the US: Some Causal Evidence," KOF Working papers 05-105, KOF Swiss Economic Institute, ETH Zurich.
    9. Alexander Murray, 2016. "Partial versus Total Factor Productivity: Assessing Resource Use in Natural Resource Industries in Canada," CSLS Research Reports 2016-20, Centre for the Study of Living Standards.
    10. Khaled Elmawazini & Gamal Atallah & Sonny Nwankwo & Yazid Dissou, 2013. "US Foreign Affiliates, Technology Diffusion and Host Country Human Development: Human Development Index versus Human Capital," Industry and Innovation, Taylor & Francis Journals, vol. 20(1), pages 69-91, January.
    11. Jitao Tang & Rosanne Altshuler, 2015. "The spillover effects of outward foreign direct investment on home countries: evidence from the United States," Working Papers 1503, Oxford University Centre for Business Taxation.
    12. Khaled Elmawazini, 2014. "FDI Spillovers, Efficiency Change and Host Country Labor Productivity: Evidence from GCC Countries," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(4), pages 399-411, December.
    13. Carrera, Leandro N. & Dunleavy, Patrick & Bastow, Simon, 2009. "Understanding productivity trends in UK tax collection," LSE Research Online Documents on Economics 25532, London School of Economics and Political Science, LSE Library.
    14. R. Quentin Grafton & Stephen Knowles & P. Dorian Owen, 2002. "Social Divergence and Productivity: Making a Connection," The Review of Economic Performance and Social Progress,in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Di (ed.), The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity, volume 2 Centre for the Study of Living Standards;The Institutute for Research on Public Policy.
    15. Basak Dalgic & Burcu Fazlioglu & Deniz Karaoglan, 2014. "Entry to Foreign Markets and Productivity: Evidence from a Matched Sample of Turkish Manufacturing Firms," ERC Working Papers 1403, ERC - Economic Research Center, Middle East Technical University, revised May 2014.
    16. Andrew Sharpe, 2001. "Productivity Trends in the Construction Sector in Canada: A Case of Lagging Technical Progress," International Productivity Monitor, Centre for the Study of Living Standards, vol. 3, pages 52-68, Fall.
    17. Andrew Sharpe & Olivier Guibaud, 2005. "Indicators of Innovation in Canadian Natural Resource Industries," CSLS Research Reports 2005-03, Centre for the Study of Living Standards.
    18. Tibor Lalinsky, 2013. "Firm competitiveness determinants: results of a panel data analysis," Working and Discussion Papers WP 4/2013, Research Department, National Bank of Slovakia.

    More about this item

    Keywords

    Total Factor Productivity; Labor Productivity; Productivity; Labour; Measurement; Capital Stock; Neoclassical Model; Growth; Data; Comparison; Growth Model;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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