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Understanding Productivity and Income Differentials Among OECD Countries: A Survey

In: The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity

  • Bart van Ark

    (Professor of Economics, University of Groningen)

Productivity and income growth rates and differentials vary widely among OECD countries. In this chapter, Bart van Ark develops a framework for the understanding of these productivity and income differences. The framework breaks GDP per capita into two basic drivers: labour supply and labour productivity. Labour supply is in turn determined by the hours worked per person employed, the share of employment in the working age population, and the share of the working age population in the total population. Labour productivity is determined by within-industry productivity growth rates and inter-sectoral shifts in employment shares. The former is affected by the efficiency in factor use, that is total factor productivity, investment in physical capital, and investment in intangible capital.

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This item is provided by Centre for the Study of Living Standards & The Institutute for Research on Public Policy in its series The Review of Economic Performance and Social Progress with number v:2:y:2002:bva.
Handle: RePEc:sls:repsls:v:2:y:2002:bva
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