Worker Output Productivity Measure

A Worker Output Productivity Measure is an economic output measure based on the proportion of economic output per worker (for some labor population over a time period).

• Context:
  • It can range from being an Individual Worker Output Measure to being an Aggregate Worker Output Measure.
  • It can range from being a Worker Output per Hour Measure, Worker Output per Hour Day, Worker Output per Hour Week, Worker Output per Year Measure, ...
  • It can be associated to a Worker Output Growth Rate.
  • It can range from being an Individual Productivity Measure to being an Aggregate Productivity Measure.
  • ...
• Example(s):
  • an Aggregate Worker Output Measure, such as:
    • a Regional-based Worker Productivity Measure, such as U.S. labor productivity (during the late 1990s).
    • an Industry Sector-based Worker Productivity Measure, such as Manufacturing Durables Sector Labor Productivity (during the 1990s).
    • http://www.treasury.govt.nz/publications/research-policy/tprp/08-02/05.htm/tpp-08-02-005.gif
  • a Software Developer Productivity Measure.
  • …
• Counter-Example(s):
  • a Worker Compensation Measure, Workers Hours Worked Measure, Worker Skill Measure.
  • a GDP Measure.
  • a GVA Measure.
  • a Capital Productivity.
  • a Total Factor Productivity.
• See: Human Labor, Purchasing Power Parity.

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References

• http://www.google.com/publicdata/explore?ds=z6409butolt8la_&ctype=l&met_y=gci_7.06&dl=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=gci_7.06&scale_y=lin&ind_y=false&rdim=world&idim=country:USA&idim=world:WLD&ifdim=world_US&dl=en&ind=false

2021

• (Wikipedia, 2021) ⇒ https://en.wikipedia.org/wiki/Workforce_productivity Retrieved:2021-6-28.
  • Workforce productivity is the amount of goods and services that a group of workers produce in a given amount of time. It is one of several types of productivity that economists measure. Workforce productivity, often referred to as labor productivity, is a measure for an organisation or company, a process, an industry, or a country.

    Workforce productivity is to be distinguished from employee productivity which is a measure employed at individual level based on the assumption that the overall productivity can be broken down to increasingly smaller units until, ultimately, to the individual employee, in order be used for example for the purpose of allocating a benefit or sanction based on individual performance (see also: Vitality curve).

    In 2002, the OECD defined it as "the ratio of a volume measure of output to a volume measure of input". Volume measures of output are normally gross domestic product (GDP) or gross value added (GVA), expressed at constant prices i.e. adjusted for inflation. The three most commonly used measures of input are: # hours worked, typically from the OECD Annual National Accounts database

    1. workforce jobs; and
    2. number of people in employment.

2021

• (Wikipedia, 2021) ⇒ https://en.wikipedia.org/wiki/Workforce_productivity#Measurement Retrieved:2021-6-28.
  • Workforce productivity can be measured in two ways, in physical terms or in price terms.
    • the intensity of labour-effort, and the quality of labour effort generally.
    • the creative activity involved in producing technical innovations.
    • the relative efficiency gains resulting from different systems of management, organization, co-ordination or engineering.
    • the productive effects of some forms of labour on other forms of labour.
  • These aspects of productivity refer to the qualitative dimensions of labour input. If an organization is using labour much more intensely, one can assume it's due to greater labour productivity, since the output per labour-effort may be the same. This insight becomes particularly important when a large part of what is produced in an economy consists of services. Management may be very preoccupied with the productivity of employees, but the productivity gains of management itself is very difficult to prove. While labor productivity growth has been seen as a useful barometer of the U.S. economy’s performance, recent research has examined why U.S. labor productivity rose during the recent downturn of 2008–2009, when U.S. gross domestic product plummeted. The validity of international comparisons of labour productivity can be limited by a number of measurement issues. The comparability of output measures can be negatively affected by the use of different valuations, which define the inclusion of taxes, margins, and costs, or different deflation indexes, which turn current output into constant output. Labor input can be biased by different methods used to estimate average hours or different methodologies used to estimate employed persons. In addition, for level comparisons of labor productivity, output needs to be converted into a common currency. The preferred conversion factors are Purchasing Power Parities, but their accuracy can be negatively influenced by the limited representativeness of the goods and services compared and different aggregation methods. To facilitate international comparisons of labor productivity, a number of organizations, such as the OECD, the Groningen Growth Centre, International Labor Comparisons Program, and The Conference Board, prepare productivity data adjusted specifically to enhance the data’s international comparability.

2021

• (Wikipedia, 2021) ⇒ https://en.wikipedia.org/wiki/Productivity#Labour_productivity Retrieved:2021-6-28.
  • In macroeconomics, a common partial productivity measure is labour productivity. Labour productivity is a revealing indicator of several economic indicators as it offers a dynamic measure of economic growth, competitiveness, and living standards within an economy. It is the measure of labour productivity (and all that this measure takes into account) which helps explain the principal economic foundations that are necessary for both economic growth and social development. In general labour productivity is equal to the ratio between a measure of output volume (gross domestic product or gross value added) and a measure of input use (the total number of hours worked or total employment). : [math]\displaystyle{ \text{labour productivity} = \frac{\text{output volume}}{\text{labor input use}} }[/math] The output measure is typically net output, more specifically the value added by the process under consideration, i.e. the value of outputs minus the value of intermediate inputs. This is done in order to avoid double-counting when an output of one firm is used as an input by another in the same measurement. In macroeconomics the most well-known and used measure of value-added is the Gross Domestic Product or GDP. Increases in it are widely used as a measure of the economic growth of nations and industries. GDP is the income available for paying capital costs, labor compensation, taxes and profits.(OECD 2008,11) Some economists instead use gross value added (GVA); there is normally a strong correlation between GDP and GVA. (Freeman 2008,5)

    The measure of input use reflects the time, effort and skills of the workforce. The denominator of the ratio of labour productivity, the input measure is the most important factor that influences the measure of labour productivity. Labour input is measured either by the total number of hours worked of all persons employed or total employment (head count). (Freeman 2008,5) There are both advantages and disadvantages associated with the different input measures that are used in the calculation of labour productivity. It is generally accepted that the total number of hours worked is the most appropriate measure of labour input because a simple headcount of employed persons can hide changes in average hours worked and has difficulties accounting for variations in work such as a part-time contract, leave of absence, overtime, or shifts in normal hours. However, the quality of hours-worked estimates is not always clear. In particular, statistical establishment and household surveys are difficult to use because of their varying quality of hours-worked estimates and their varying degree of international comparability.

    GDP per capita is a rough measure of average living standards or economic well-being and is one of the core indicators of economic performance. (OECD 2008, 14) GDP is, for this purpose, only a very rough measure. Maximizing GDP, in principle, also allows maximizing capital usage. For this reason, GDP is systematically biased in favour of capital intensive production at the expense of knowledge and labour-intensive production. The use of capital in the GDP-measure is considered to be as valuable as the production's ability to pay taxes, profits and labor compensation. The bias of the GDP is actually the difference between the GDP and the producer income. (Saari 2011,10,16)

    Another labour productivity measure, output per worker, is often seen as a proper measure of labour productivity, as here: “Productivity isn't everything, but in the long run it is almost everything. A country's ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.“ This measure (output per worker) is, however, more problematic than the GDP or even invalid because this measure allows maximizing all supplied inputs, i.e. materials, services, energy and capital at the expense of producer income.

2015a

• http://www.bls.gov/bls/productivity.htm
  • QUOTE: Productivity and related cost measures are designed for use in economic analysis and public and private policy planning. The data are used to forecast and analyze changes in prices, wages, and technology. There are two primary types of productivity statistics:
    • Labor productivity measures output per hour of labor.
    • Multifactor productivity measures output per unit of combined inputs, which consist of labor and capital, and, in some cases, intermediate inputs such as fuel.

2015b

• http://www.bls.gov/news.release/prod2.nr0.htm
  • QUOTE: Nonfarm business sector labor productivity increased at a 1.6-percent annual rate during the third quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output increased 1.2 percent and hours worked decreased 0.5 percent. ...

    ... Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers.

     Unit labor costs in the nonfarm business sector increased 1.4 percent in the third quarter of 2015, reflecting a 3.0-percent increase in hourly compensation and a 1.6-percent increase in productivity.

     Unit labor costs increased 2.0 percent over the last four quarters. (See tables A and 2.) BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs, and increases in output per hour tend to reduce them.

2013

• http://www.investopedia.com/terms/l/labor-productivity.asp
  • A measurement of economic growth of a country. Labor productivity measures the amount of goods and services produced by one hour of labor. More specifically, labor productivity measures the amount of real GDP produced by an hour of labor. Growing labor productivity depends on three main factors: investment and saving in physical capital, new technology and human capital.

    For example, suppose the real GDP of an economy is $10 trillion and the aggregate hours of labor in the country was 300 billion. The labor productivity would be $10 trillion divided by 300 billion, equaling about $33 per labor hour. Growth in this labor productivity number can usually be interpreted as improvements or rising standards of living in the country.

2011

• (Fleck et al., 2011) ⇒ Susan Fleck, John Glaser, and Shawn Sprague. (2011). “The compensation-productivity gap: a visual essay.” In: Monthly Labor Review Online, 134(1).
  • QUOTE: Labor productivity is output, adjusted for price changes, divided by hours worked at all jobs. Productivity in the U.S. nonfarm business sector grew an average of 2.2 percent per year over the past 63 years, despite a prolonged slowdown from 1973 to 1995.

2009

• http://www.businessdictionary.com/definition/labor-productivity.html
  • Rate of output per worker (or a group of workers) per unit of time as compared with an established standard or expected rate of output.

2001

• (Hansen, 2001) ⇒ Bruce E. Hansen. (2001). “The New Econometrics of Structural Change: Dating Breaks in U.S. Labor Productivity.” In: The Journal of Economic Perspectives, 15(4).
  • ABSTRACT: We have seen the emergence of three major innovations in the econometrics of structural change in the past fifteen years: (1) tests for a structural break of unknown timing; (2) estimation of the timing of a structural break; and (3) tests to distinguish unit roots from broken time trends. These three innovations have dramatically altered the face of applied time series econometrics. In this paper, we review these three innovations, and illustrate their application through an empirical assessment of U.S. labor productivity in the manufacturing durables sector.

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