IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

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

  • Timothy C. Sargent
  • Edgard R. Rodriguez

Two competing measures of productivity are commonly used by both academics and policy makers. These are labour productivity—output per hour—and total factor productivity (TFP)—which measures productivity net of the contribution of capital. Which measure is the ‘best’ has been the subject of recent debate in academic and policy circles. In this paper, we argue that both measures have their place, and that neither tells the whole story. TFP is more useful over the long run, assuming that one is confident about the underlying growth process and the quality of capital stock data, whereas labour productivity is more reliable in the short run, when there is doubt about the underlying growth process, or when capital stock data are unreliable. Deux mesures concurrentes de la productivité sont habituellement utilisées par les universitaires et les décideurs. Il s’agit de la productivité du travail — la productivité par heure de travail —et de la productivité totale des facteurs —, qui mesure la productivité, déduction faite de la contribution du capital. La question de savoir quelle est la « meilleure » mesure a fait l’objet de débats récemment dans les milieux universitaires et politiques. Dans ce document, nous soutenons que les deux mesures sont utiles et que ni l’une ni l’autre ne donne une image complète de la situation. La productivité totale des facteurs est plus utile à long terme, en supposant que l’on ait confiance au processus de croissance sous-jacent et à la qualité des données sur le stock de capital, tandis que la productivité du travail est plus fiable à court terme, lorsqu’on doute du processus de croissance sous-jacent ou que les données sur le stock de capital ne sont pas fiables.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.fin.gc.ca/scripts/Publication_Request/request2_e.asp?doc=wp2001-04e.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Gustavo Durango)


Download Restriction: no

Paper provided by Department of Finance Canada in its series Working Papers-Department of Finance Canada with number 2001-04.

as
in new window

Length:
Date of creation:
Date of revision:
Handle: RePEc:fca:wpfnca:2001-04
Contact details of provider: Postal: 140 O'Connor St., Ottawa, K1A 0G5
Phone: 613-992-1573
Web page: http://www.fin.gc.ca/
More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Greenwood, J. & Hercowitz, Z. & Krusell, P., 1996. "Long-Run Implications of Investment-Specific Technological Change," RCER Working Papers 420, University of Rochester - Center for Economic Research (RCER).
  2. Charles R. Hulten, 2000. "Total Factor Productivity: A Short Biography," NBER Working Papers 7471, National Bureau of Economic Research, Inc.
  3. 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.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:fca:wpfnca:2001-04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gustavo Durango)

The email address of this maintainer does not seem to be valid anymore. Please ask Gustavo Durango to update the entry or send us the correct address

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.