Disaggregate productivity comparisons: sectoral convergence in OECD countries

International comparisons of productivity have used exchange rates or purchasing power parity (PPP) to make output comparable across countries. While aggregate PPP holds well in the long run, sectoral deviations are persistent. It raises the need for a currency conversion factor at the same level of aggregation as the output that is compared. Mapping prices from household expenditure surveys into the industrial classification of sectors and adjusting for taxes and international trade, I obtain an expenditure-based sector-specific PPP. Using detailed price data for up to 8 years between 1970 and 1999, I test whether the sectoral PPPs adequately capture differential changes in relative prices between countries. They work well for agriculture and the majority of industrial sectors, but not for most service sectors and for manufacturing sectors that produce differentiated products. Using the most appropriate conversion factor for each industry, productivity convergence is found to be taking place in all but a few industries for a group of 14 OECD countries. The latter results are robust to the base year used for the currency conversion.     

Endogenous technology and sectoral productivity: Chile 1962–1982

The choice of sectoral productivity in Chile is studied within the choice of technique approach. The choice of production techniques is an economic problem in that the techniques implemented at any time reflect the prevailing economic environment, as well as its history. Incorporating this choice in the analysis adds another channel through which market conditions can influence productivity while neglecting this simple fact leads to a distorted view of the production process. This view of production is applied here to present an econometric framework for estimating sectoral production functions. The derived function has the form of a Cobb-Douglas function, but its coefficients are allowed to vary in response to the economic environment and to factor utilization. The results show the important effect that macro, external, and institutional shocks have on the level and cyclical behavior of productivity.The editor of this paper was Jaime de Melo.     

Temporarily asymmetric information and labour contracts

Under the assumption that workers are more heavily credit rationed than firms, the standard model of testing and self-selection in the labour market is extended. The two main findings are that ex post inefficient termination may be used as a self-selection device and that when workers can be of more than two different productivities, only the best worker should be overpaid.     

The economic impact of migration: productivity analysis for Spain and the UK

Over the past 20?years labour has become increasingly mobile and whilst employment and earnings effects in host countries have been extensively analysed, the implications for firm and industry performance have received far less attention. This paper explores the direct economic consequences of immigration on host nations?? productivity performance at a sectoral level in two very different European countries, Spain and the UK. Whilst the UK has traditionally seen substantial immigration, for Spain the phenomenon is much more recent. Our findings from a growth accounting analysis show that migration has made a negative contribution to labour productivity growth in Spain and a negative but negligible contribution in the UK. This difference is driven by a positive impact from migrant labour quality in the UK. This finding broadly holds across all sectors, but we note considerable variation in magnitudes. Labour productivity growth has a neutral contribution from migrant labour in construction and personal services in the UK, whilst in every case in Spain the effect is negative, most strongly in agriculture. Using an econometric approach to production function estimation we observe a positive long term effect on total factor productivity from migrant workers in the UK and a negative effect in Spain. Our findings suggest that either the UK is better at assimilating migrants or is more selective in terms of who is permitted to migrate.     

Social networks and labour productivity in Europe: an empirical investigation

This paper uses firm-level data recorded in the Amadeus database to investigate the distribution of labour productivity in different European countries. We find that the upper tail of the empirical productivity distributions follows a decaying power-law, whose exponent α is obtained by a semi-parametric estimation technique recently developed by Clementi et al. [Physica A 370(1):49–53, 2006]. The emergence of “fat tails” in productivity distribution has already been detected in Di Matteo et al. [Eur Phys J B 47(3):459–466, 2005] and explained by means of a model of social network. Here we show that this model is tested on a broader sample of countries having different patterns of social network structure. These different social attitudes, measured using a social capital indicator, reflect in the power-law exponent estimates, verifying in this way the existence of linkages among firms’ productivity performance and social network.     

Dissecting aggregate output and labour productivity change

This paper is about the relation between output and labour productivity measures for individual production units and for aggregates such as industries, sectors, or economies. In the framework of discrete time periods several useful, symmetric expressions are derived and confronted with results from the literature.     

Returns to scale effect in labour productivity growth

Economists acknowledge that technical progress and growth in capital inputs increase labour productivity (LP). However, less focus is given to the realization that changes in labour input alone could also affect LP. Because this effect disappears when the short-run technology exhibits constant returns to scale, we call it the returns to scale effect. We decompose growth in LP into three contributing factors: (1) technical progress, (2) capital input growth and the (3) returns to scale effect. We propose theoretical measures for these three components and show that they coincide with the index number formulae consisting of prices and quantities of inputs and outputs. Subsequently, we apply the results of our decomposition to US industry data for 1987–2009. LP in the services sector is shown to grow much slower than that in the goods sector during the 1987–1995 productivity slowdown period. We conclude that the returns to scale effect can considerably explain the gap in LP growth between the two industry groups.     

Employment contracts,job search theory,and labour turnover: Preliminary empirical: Results

The empirical implications of a model in which a worker participates in a labour market in which a job offer consists of a wage-hour pair are examined. Here, hours are not freely adjustable and the wage rate is typically different from the marginal value of leisure. A theoretical model is proposed; some natural conjectures on effects of wage changes are shown not to hold; and a preliminary empirical investigation based on Denver Income Maintenance Experiment data is undertaken.     

Sources of labour productivity: a panel investigation of the role of military expenditure

The objective of this paper is to examine the effect of military expenditure on productivity performance in 70 countries, over the period 1989–2011. We employ the labour productivity as a measure of productivity, while the military burden is initially utilized as an indicator of the level of military expenditure within the framework of a transcendental production function. Applying the system GMM method, it is observed that defence expenditure exerts a negative and statistically significant effect on labour productivity. The negative impact of military expenditure still holds, when an alternative measure of military spending is introduced into the model. The main policy implication of these results is that the overall productivity would be expected to improve, if military expenditures are replaced by civilian expenditures.     

Developing and validating the qualitative labour productivity measurement in service industry

Quality & Quantity - Over the past two centuries, labour productivity (LP) measured has long been synonymous with productivity measured in manufacturing quantitative features reflecting to its...     

Directed technological change,skill complementarities and sectoral productivity growth: evidence from industrialized countries during the new economy

Recent growth accounting exercises attribute strong productivity growth to increased investments in information and communication technologies (ICT) over the last decades, but abstain from potential complementarity effects with other inputs. Based on three different sets of industrialized countries, this study shows that sectoral productivity growth originated from ICT-skill complementarities and skill-biased technological change (SBTC) during the New Economy. In particular, Scandinavian goods-producing sectors and Anglo–Saxon market services reveal strong SBTC effects that originated from ICT-skill complementarities, while such effects were totally missing in Continental market services during the same periods. Further drivers of productivity growth were intermediate and non-ICT capital deepening.     

Non-separability and sectoral comovement in a sticky price model

This paper resolves the sectoral comovement problem between nondurable and durable outputs that arises in response to a monetary shock in a two-sector sticky price model with flexibly priced durable goods. We analytically demonstrate that the non-separability between aggregate consumption and labor can generate the comovement between nondurable and durable outputs in response to a monetary policy shock. We then estimate the degree of non-separability, together with other parameters, using a Bayesian approach. We find that the non-separable preferences are supported by the data and our estimated model generates the sectoral comovement in response to a monetary shock.     

Social exclusion and labour market transitions: a multi-state multi-spell analysis using the BHPS

In this empirical paper, we assess how social exclusion arises in the context of labour market transition behaviour. We estimate a multi-state multi-spell competing risks model and identify five states: high skilled employment, intermediate skilled employment, low skilled employment, unemployment and out-of-the-labour market. Using data from the first seven waves of the British Household Panel Survey, we show that a substantial number of workers were trapped in a vicious circle of low-skilled employment, unemployment and inactivity in the 1990s. Workers who are part of the so-called flexible workforce are more likely to suffer social exclusion.     

Mělée on the Mersey: contracts,competition and labour relations on the docks

Although strikes on the waterfront are now rare, the Liverpool dock dispute is indicative of how deregulation of the dockland labour market has compelled operators to cut ever more deeply into labour costs, and casualise the employment relationship. This has had an adverse effect on port performance and undermines the ability of employers to compete effectively.     

Assimilation of immigrants in Spain: A longitudinal analysis

In this paper we use a new panel dataset to analyse the earnings assimilation of immigrants in Spain. We show that immigrants reduce the wage gap relative to natives by 15 pp during the first 5–6 years after arrival, but the earnings differential does not disappear completely. Earnings assimilation is not homogeneous across different nationalities, being faster for South-American and European (new accession countries to EU) immigrants compared to Africans. Finally, we show that human capital gains within the firm as opposed to higher mobility contribute the most to their assimilation process.     

The impact of embodied and disembodied technical progress on productivity gaps—An applied general equilibrium analysis for Germany and Spain

The purpose of this paper is to analyze the impact of disembodied and of capital embodied technical progress on the closing of international productivity gaps. Within the framework of a partial equilibrium model the direct effect of technical progress on the change of productivity gaps can be calculated directly. However, since the two types of technical progress affect unit costs of industries differently, and hence the system of relative prices, an applied general equilibrium model is required in order to measure the indirect effect of technical progress on the change in productivity gaps. We employ variable cost functions with quasi-fixed effective capital, depending on the rate of embodied technical change, in order to generate a system of prices. Based on similarly structured applied general equilibrium models for Spain and Germany, we quantify the effects of sectoral embodied or disembodied technical change on reduction in national inflation as well as the effect on closing productivity gaps.     

An actuarial and financial analysis for ECU insurance contracts

The aim of this paper is to analyse the Italian ECU linked policy Europea. We will show that the adjustment of premium and capital as well as the investment policy have to take into account targets of purchasing power and stability. In our approach a recursive improvement is allowed according to the market conditions. A game model is described and qualitative aspects are introduced through fuzzy elements, showing that the Company's behavior has to be more flexible towards a truly dynamic contract, which is also adjusted through the implementation clauses for premium and capital.The research has been partially supported by the Italian Ministery of Education and the National Research Council.