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Productivity Growth in Services Industries: Is There a Role for Measurement?

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  • Anita Wölfl

Abstract

Productivity growth has tended to be slower in service industries than in goods industries. Anita Wölfl of the OECD finds that measurement error may be responsible for slower productivity growth in the service sector. She notes that some service industries in certain OECD countries have experienced negative productivity growth over long periods, despite intensive use of Information and COmmunication Technologies (ICTs), exposure to international competition, and the existence of economies of scale. Wölfl discusses the several possible sources of measurement error that may lead to this unexpected result and quantifies the impact of correcting for measurement errors on aggregate productivity growth.

Suggested Citation

  • Anita Wölfl, 2004. "Productivity Growth in Services Industries: Is There a Role for Measurement?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 66-80, Spring.
    • Handle: RePEc:sls:ipmsls:v:8:y:2004:7
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    References listed on IDEAS

    as
    1. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150-150, March.
    2. Nadim Ahmad & François Lequiller & Pascal Marianna & Dirk Pilat & Paul Schreyer & Anita Wölfl, 2003. "Comparing Labour Productivity Growth in the OECD Area: The Role of Measurement," OECD Science, Technology and Industry Working Papers 2003/14, OECD Publishing.
    3. Someshwar Rao & Andrew Sharpe & Jianmin Tang, 2004. "Productivity Growth in Service Industries: A Canadian Success Story," CSLS Research Reports 2004-01, Centre for the Study of Living Standards.
    4. Martin Neil Baily & Robert J. Gordon, 1988. "The Productivity Slowdown, Measurement Issues, and the Explosion of Computer Power," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 347-432.
    5. Lawrence Slifman & Carol Corrado, 1999. "Decomposition of Productivity and Unit Costs," American Economic Review, American Economic Association, vol. 89(2), pages 328-332, May.
    6. Anita Wölfl, 2003. "Productivity Growth in Service Industries: An Assessment of Recent Patterns and the Role of Measurement," OECD Science, Technology and Industry Working Papers 2003/7, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Evangelista, Rinaldo & Lucchese, Matteo & Meliciani, Valentina, 2013. "Business services, innovation and sectoral growth," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 119-132.
    2. Jula, Dorin & Jula, Nicoleta, 2007. "Inter-industries productivity gap and the services employment dynamics," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 4(2), pages 5-15, June.
    3. Evangelista, Rinaldo & Vezzani, Antonio, 2010. "The economic impact of technological and organizational innovations. A firm-level analysis," Research Policy, Elsevier, vol. 39(10), pages 1253-1263, December.
    4. Dankbaar, Ben & Vissers, Geert, 2009. "Of knowledge and work," MPIfG Working Paper 09/16, Max Planck Institute for the Study of Societies.
    5. Andrés Maroto-Sanchez, 2010. "Growth and productivity in the service sector: The state of the art," Working Papers 07/10, Instituto Universitario de Análisis Económico y Social.
    6. Peter Havlik, 2005. "Structural Change, Productivity and Employment in the New EU Member States," wiiw Research Reports 313, The Vienna Institute for International Economic Studies, wiiw.

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    More about this item

    Keywords

    Productivity Growth; Service Industries; Services; Service Sector; Baumol’s Cost Disease; Measurement Error; Output Measurement;
    All these keywords.

    JEL classification:

    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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