Why are Americans More Productive than Canadians?
Historically, per capita income in the United States has exceeded those in Canada and this difference has reflected higher labour productivity levels south of the 49th parallel. In this article, Andrew Sharpe of the Centre for the Study of Living Standards provides estimates of the size of the gap in aggregate labour productivity between the United States and Canada and discuss possible explanation of the gap. He points out that based on average weekly hours estimates from the U.S. household survey, total economy output per hour in Canada in 2002 was 89 per cent of the U.S. level, compared to 81 per cent using estimates from the establishment survey. Sharpe concludes that the Canada-U.S. aggregate labour productivity gap reflects Canada's lower capital intensity of production, an innovation gap manifested by lower R&D expenditure, a smaller and less dynamic high tech sector, less developed human capital at the top end of the labour market, and more limited economies of scale and scope.
Volume (Year): 6 (2003)
Issue (Month): (Spring)
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