Measurement and Interpretation of Productivity (1979) / Chapter Skim
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1 Introduction, Findings, and Recommendations
1 Introduction, Findings, and Recommendations
Pages 3-18
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From page 3... ...
This apparent slowdown in productivity growth causes serious concern for several reasons. A slowdown would mean a slower rate of growth in real income per capita in the standard of living.
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Rather, most productivity measures are composites of other measures and data collected from a wide variety of sources for many different kinds of uses. The task of reviewing productivity measures thus comes uncomfortably close to that of reviewing the entire body of economic statistics collected by the federal government.
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The problems in measuring labor input include the appropriate concept of hours of work and whether labor input should be differentiated by some measure of its composition, such as skill, experience, or education. The problems of measuring the input of capital services include the treatment of depreciation, obsolescence, and changes .
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Output per hour is also affected by changes in technology, the capital/labor ratio, changes in inputs of intermediate goods, rates of capacity utilization, and many other factors as well as by the interaction of these factors. The BES now publishes cautionary statements warning users not to attribute changes in output per hour to labor alone, but these statements appear only in the annual bulletin on productivity for detailed industries and in selected articles in the Monthly Labor Review.
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Recommendation 3. The Panel recommends that the Bureau of Labor Statistics and the Bureau of Economic Analysis explore methods for estimating the implications of error reduction in component measures for the reduction of overall error in productivity measures beyond that corrected by routine revisions.
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and the Bureau of Labor Statistics (BES) seek to improve their existing price indexes and to develop auxiliary measures of price change.
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For the federal government, BES has developed productivity measures that cover about 65 percent of the federal civilian work force; these measures are not used to expand the output measure for the private business sector, however, because of their limited coverage and the difficulty of defining the outputs of federal agencies. For state and local governments, private researchers have developed measures of output and productivity for some of the more readily identifiable services, such as police protection and education.
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Recommendation 6. The Panel concludes that many useful analyses of economic and social welfare issues can be undertaken within the framework of output and input used in the current official measures.
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The Panel recommends that the Bureau of Labor Statistics devote more resources to studying the use of weighted labor input measures. The purpose of this effort would be the preparation of one or more weighted measures of labor input for broad aggregates of economic activity, such as the private business sector.
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and industry. Recommendations have been made in the reports of the Wealth Inventory Planning Study and the GNP Data Improvement Project of ways to improve capital stock and input estimates.
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Recommendation 12. The Panel recommends that the Census Bureau in its periodic reports on real gross output for detailed industries based on successive quinquennial censuses, include estimates of the real amount of intermediate purchases of materials, including energy, for those detailed industry categories for which data are available.
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From page 14... ...
Multi-factor measures are also useful in monitoring and studying the sources of output growth other than those from inputs including technical change, managerial innovations, and improved resource allocation. Changes in the growth rates of multi-factor productivity measures are due entirely to these non-input sources.
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15 Although the existing research on the sources of productivity change provides useful knowledge about the broad patterns of contributions to growth, it tells us relatively little about its more detailed aspects and patterns. How do the various inputs and the non-input sources interact with one another (for example, the rate of capital investment and the rate of embodied technical change)
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(Chapter 8) Either because of legal restrictions or because of provisions regarding confidentiality for companies providing data voluntarily, the federal statistical agencies seldom interchange data.
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Recommendation 22. The Panel recommends continued and increasing support for the work of the International Comparisons Project, along the lines suggested by the Statistical Office of the United Nations.
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The Panel endorses continued support for private research on international productivity comparisons, with some enlargement of its scale as opportunities for useful projects arise. The Panel also believes that research within government should be expanded along lines to be determined by the relevant agencies and adjusted on the basis of their experience.
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