Productivity Growth in Service Industries: A Canadian Success Story
The Canadian service sector has performed well in recent years in terms of labour and multifactor productivity growth, both in absolute terms and relative to the United States, offsetting much of the poorer performance of the manufacturing sector. Service sector labour productivity growth has also shown a marked acceleration in both Canada and the United States in recent years relative to earlier periods. The objective of this paper is to identify the factors behind this relative Canadian success story. The sources of the acceleration in service sector labour productivity growth were different in the two countries. In Canada, increased multifactor productivity growth was responsible for 70 per cent of the labour productivity growth acceleration. In the United States, on the other hand, increased capital intensity and intermediate input intensity were the most important contributors to the service sector labour productivity growth acceleration. In Canada, the contribution of capital intensity growth to service sector labour productivity growth actually fell between 1981-1995 and 1995-2000. The factor driving Canada’s superior service sector labour productivity growth has been better multifactor productivity growth, suggesting a productivity convergence to the U.S. level. A faster pace of human capital accumulation relative to the United States, as measured by growth in the proportion of workers with a university degree, fostered the catch-up process of Canadian service industries.
|Date of creation:||Feb 2004|
|Date of revision:|
|Contact details of provider:|| Postal: 151 Slater Street, Suite 710, Ottawa, ON K1P 5H3|
Web page: http://www.csls.ca/
More information through EDIRC
|Order Information:|| Web: http://www.csls.ca Email: |
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.:
- Someshwar Rao & Jianmin Tang & Weimin Wang, 2003. "Canada's Recent Productivity Record and Capital Accumulation," International Productivity Monitor, Centre for the Study of Living Standards, vol. 7, pages 24-38, Fall.
- Jeremy Smith, 2004. "Aggregate Labour Productivity Growth in Canada and the United States: Definitions, Trends and Measurement Issues," CSLS Research Reports 2004-04, Centre for the Study of Living Standards.
- Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005.
"Growth of U.S. Industries and Investments in Information Technology and Higher Education,"
in: Measuring Capital in the New Economy, pages 403-478
National Bureau of Economic Research, Inc.
- Dale Jorgenson & Mun Ho & Kevin Stiroh, 2003. "Growth of US Industries and Investments in Information Technology and Higher Education," Economic Systems Research, Taylor & Francis Journals, vol. 15(3), pages 279-325.
- Jeffrey I. Bernstein & Richard G. Harris & Andrew Sharpe, 2002. "The Widening Canada-US Productivity Gap in Manufaturing," International Productivity Monitor, Centre for the Study of Living Standards, vol. 5, pages 3-22, Fall.
- Jianmin Tang & Weimin Wang, 2004. "Sources of aggregate labour productivity growth in Canada and the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 37(2), pages 421-444, May.
When requesting a correction, please mention this item's handle: RePEc:sls:resrep:0401. 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: (CSLS)
If references are entirely missing, you can add them using this form.