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The U.S. Productivity Slowdown: A Case of Statistical Myopia

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  • Michael R. Darby

    (UCLA)

Abstract

This paper identifies three major periods: 1900-1929, 1929-1965, and 1965-1978. In contrast to the middle period, the extreme periods are characterized by rapid growth in private employment and hours worked; because growth in private productivity increases by less, measured labor productivity growth falls compared to the middle period. However this fall reflects a substantial substitution of quantity for quality in labor force growth: after private employment and hours are adjusted for age, sex, immigration, and education, no difference is observed among the average quality-adjusted labor productivity growth rates. Substantial variation in these growth rates remains within the 1929-1965 and 1965-1978 periods. Slow quality-adjusted labor productivity growth during 1929-1948 is just offset by unusually rapid growth during 1948-1965; these variations are attributed to the near cessation of investment during the Depression and World War II and subsequent recovery of the capital-labor ratio. Thus no substantial variations in total factor productivity growth or technical progress is found. Variations inproductivity growth within 1965-1978 are explained by price-control induced biases in reported deflated output. Correction of these biases results inequal quality-adjusted labor productivity growth in 1965-1973 and 1973-1978.A substantial program of future research is proposed. A data appendix is included.
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  • Michael R. Darby, 1983. "The U.S. Productivity Slowdown: A Case of Statistical Myopia," UCLA Economics Working Papers 304, UCLA Department of Economics.
  • Handle: RePEc:cla:uclawp:304
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    1. Cox, Charles C, 1980. "The Enforcement of Public Price Controls," Journal of Political Economy, University of Chicago Press, vol. 88(5), pages 887-916, October.
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    Cited by:

    1. Boisso, Dale & Grosskopf, Shawna & Hayes, Kathy, 2000. "Productivity and efficiency in the US: effects of business cycles and public capital," Regional Science and Urban Economics, Elsevier, vol. 30(6), pages 663-681, December.
    2. Delorme, Charles Jr. & Thompson, Herbert Jr. & Warren, Ronald Jr., 1999. "Public Infrastructure and Private Productivity: A Stochastic-Frontier Approach," Journal of Macroeconomics, Elsevier, vol. 21(3), pages 563-576, July.
    3. Lynne G. Zucker & Michael R. Darby & Marilynn B. Brewer, 1994. "Intellectual Capital and the Birth of U.S. Biotechnology Enterprises," NBER Working Papers 4653, National Bureau of Economic Research, Inc.
    4. Palle S. Andersen, 1983. "The productivity slowdown and its policy implications," BIS Working Papers 8, Bank for International Settlements.
    5. Fuess, Scott Jr. & van den Berg, Hendrik, 1995. "The impact of transactional activities on productivity growth in Canada, and a comparison with the United States," The North American Journal of Economics and Finance, Elsevier, vol. 6(1), pages 1-15.
    6. Burki, Abid A. & Terrell, Dek, 1998. "Measuring production efficiency of small firms in Pakistan," World Development, Elsevier, vol. 26(1), pages 155-169, January.
    7. John A. Tatom, 1991. "The 1990 oil price hike in perspective," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 3-18.
    8. Paul T. Decker & Jennifer King Rice & Mary T. Moore, 1997. "Education and the Economy: An Indicators Report," Mathematica Policy Research Reports 82b0174c4b194dabb3401d7b6, Mathematica Policy Research.
    9. Hélène Baudchon, 1997. "Le paradoxe du ralentissement du progrès technique," Revue de l'OFCE, Programme National Persée, vol. 60(1), pages 187-217.
    10. Fuess, Scott Jr. & Van den Berg, Hendrik, 1996. "Transactional activities and total factor productivity growth in Taiwan," Journal of Asian Economics, Elsevier, vol. 7(4), pages 635-650.

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