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A Comparison of Canadian and U.S. Productivity Levels: An Exploration of Measurement Issues

Author

Listed:
  • Baldwin, John R.
  • Maynard, Jean-Pierre
  • Tanguay, Marc
  • Wong, Fanny
  • Yan, Beiling

Abstract

This paper examines the level of labour productivity in Canada relative to that of the United States in 1999. In doing so, it addresses two main issues. The first is the comparability of the measures of GDP and labour inputs that the statistical agency in each country produces. Second, it investigates how a price index can be constructed to reconcile estimates of Canadian and U.S. GDP per hour worked that are calculated in Canadian and U.S. dollars respectively. After doing so, and taking into account alternative assumptions about Canada/U.S. prices, the paper provides point estimates of Canada's relative labour productivity of the total economy of around 93% that of the United States. The paper points out that at least a 10 percentage point confidence interval should be applied to these estimates. The size of the range is particularly sensitive to assumptions that are made about import and export prices.

Suggested Citation

  • Baldwin, John R. & Maynard, Jean-Pierre & Tanguay, Marc & Wong, Fanny & Yan, Beiling, 2005. "A Comparison of Canadian and U.S. Productivity Levels: An Exploration of Measurement Issues," Economic Analysis (EA) Research Paper Series 2005028e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp5e:2005028e
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    File URL: http://www5.statcan.gc.ca/olc-cel/olc.action?ObjId=11F0027M2005028&ObjType=46&lang=en&limit=0
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    References listed on IDEAS

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    1. D. J. Daly, 1972. "Uses of International Price and Output Data," NBER Chapters,in: International Comparisons of Prices and Output, pages 85-141 National Bureau of Economic Research, Inc.
    2. David Card & Richard B. Freeman, 2002. "What Have Two Decades of British Economic Reform Delivered in Terms of Productivity Growth?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 5, pages 41-52, Fall.
    3. Baldwin, John R. & Harchaoui, Tarek, 2002. "Productivity Growth in Canada," Productivity Growth in Canada, Statistics Canada, Economic Analysis Division, number stcb6e, June.
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    Citations

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    Cited by:

    1. John R. Baldwin & Beiling Yan, 2007. "Exchange Rate Cycles and Canada/US Manufacturing Prices," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(3), pages 508-533, October.
    2. Someshwar Rao & Jianmin Tang & Weimin Wang, 2008. "What Explains the Canada-US Labour Productivity Gap?," Canadian Public Policy, University of Toronto Press, vol. 34(2), pages 163-192, June.
    3. Baldwin, John R. & Maynard, Jean-Pierre & Wong, Fanny, 2005. "The Output Gap Between Canada and the United States: The Role of Productivity (1994-2002)," Insights on the Canadian Economy 2005009e, Statistics Canada, Economic Analysis Division.
    4. Frank T. Denton, 2007. "On the Sensitivity of Aggregate Productivity Growth Rates to Noisy Measurement," Social and Economic Dimensions of an Aging Population Research Papers 192, McMaster University.
    5. Wulong Gu & Amélie Lafrance, 2010. "Productivity Growth in Canadian and U.S. Regulated Industries," International Productivity Monitor, Centre for the Study of Living Standards, vol. 19, pages 50-65, Spring.
    6. Maynard, Jean-Pierre, 2007. "A Comparison of GDP Per Capita in Canada and the United States from 1994 to 2005," Insights on the Canadian Economy 2007016e, Statistics Canada, Economic Analysis Division.
    7. Andrew Sharpe, 2007. "Lessons for Canada from International Productivity Experience," International Productivity Monitor, Centre for the Study of Living Standards, vol. 14, pages 20-37, Spring.
    8. Andrew Sharpe, 2007. "Three Policies to Improve Productivity Growth in Canada," CSLS Research Reports 2007-05, Centre for the Study of Living Standards.
    9. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
    10. Wulong Gu, 2012. "Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada: Response to Diewert and Yu," International Productivity Monitor, Centre for the Study of Living Standards, vol. 24, pages 49-62, Fall.

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    Keywords

    Data analysis; Economic accounts; Productivity accounts; Statistical methods;

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