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November 03, 2005

Long Productivity

Michael Mandel

After today's unexpected good productivity numbers, I decided to see what twenty-year productivity growth looks like. Here is the chart:

That's pretty impressive. The twenty year time period should wash out a lot of the impact of business cycles. Still, the line turns up at, ta-da!, the beginning of 1997--or the beginning of the New Economy.

04:53 PM

Growth

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Tracked on November 6, 2005 03:35 PM

The productivity being measured here is specifically *labor* productivity..am I correct? It would be interesting to see trends on the productivity of capital assets, as well.

Posted by: David Foster at November 3, 2005 05:46 PM

Yes, it's labor productivity. Interestingly enough, capital productivity has been falling since the mid 1960s, but the rate of decline has decisively slowed in recent years.

20 year growth rate of capital productivity

period ending

1972 -0.1%

1982 -1.2%

1992 -1.1%

2002 -0.3%

Posted by: Mike Mandel at November 4, 2005 11:10 AM

I have been trying to calculate productivity at the state level. So far Real GSP/Employment seems to work the best. This puts productivity in terms of average value of output per employee. This number is low because GSP excludes federal employee compensation, but they are included in employment. The annual average weekly hours data is not available for total employment so it is impossible to convert to output per hour at the state level. It is interesting to rank GSP per employee by state.

Posted by: Nick at November 4, 2005 12:43 PM

How much of this is demographics, say the population of 35 to 50 year olds when people are more skilled in their careers?

Posted by: Lord at November 5, 2005 12:20 PM

I would think that something like a 50 year chart would be more informative. It would show that the 1975-95 slowdown was the exception, not the rule. Moreover, the recent productivity miracle is just a rebound to historic norms.

Posted by: spencer at December 2, 2005 03:56 PM


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