More on Labor Productivity

My post yesterday implied that Japanese labor productivity is significantly lower than American labor productivity. I found a paper (PDF) that estimates trends in labor productivity between 1980 and 2002 for several countries including the US, Japan, and France. During this period, the PPP-adjusted Japanese labor productivity has consistently lagged behind American labor productivity by about $15, and the current figures are $22 and $36.

Another paper (PDF) from the OECD estimates labor productivity for all OECD countries in 2004. This gives similar results. Some observations:

1. The trends shown in the first paper are interesting in that the relationships between the countries shown (except for China) are remarkably stable in absolute terms. I'm not sure what to make of this.

2. I've always been under the impression that South Korea was a fairly well-developed nation, but their labor productivity is only 40% of the US's.

3. While France has a much lower GDP than the US, labor productivity is about the same. The differences in GDP are due to lower labor force participation, higher unemployment, and shorter workweeks. I suspect that France's high productivity is due in part to regulations that shut low-skill workers out of the market.

4. Belgium's labor productivity is surprisingly high, too (110% of American productivity).

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I think this is largely due

I think this is largely due to the great outsourcing of labor to other countries such as China. First worlds have a notion that labor is lowly so they outsource.