This bulletin contains annual estimates of labor productivity for the G7 developed countries (Canada, France, Germany, Italy, Japan, UK and US) up to 2016. Labor productivity measures the amount of economic output that is produced by a unit of labor input and is an important measure of economic performance.
Output is measured by gross domestic product (GDP). Labor input is measured in two ways – by total hours worked and by the number of workers in employment. These two measures of labor input can yield different results, reflecting differences in working patterns across countries and compositional movements over time, such as changes in the part-time share of employment.
Comparability across countries is achieved by using estimates of GDP and labor inputs from a common source (the Statistics Directorate of the Organisation for Economic Co-operation and Development (OECD)) as far as possible. These are the best data available for international comparisons at the time of publication, although they may differ from the Office for National Statistics’ (ONS’) headline measures. The headline labor measures which OECD publish will differ slightly in their seasonal profile. We convert local currency-based measures of GDP using purchasing power parity (PPP) exchange rates, which attempt to equalize the cost of a representative basket of goods and services in countries with different national currencies.
OECD has recently discontinued the publication of their Annual Labor Force Statistics (ALFS) database total employment measure, which has historically been used as the employment measure for this release. For the missing recent years in the total employment series, Eurostat (for European countries) and an alternative OECD employment series (for non-European countries) are used to project the data. This method is being used on an interim basis pending a more detailed review of the international comparisons of productivity (ICP) labor inputs and further engagement with OECD. We will report on progress with this work in our January 2018 Productivity Bulletin with the aim of delivering an improved source in our April 2018 International Comparisons of Productivity release.
The labor productivity measures in this bulletin are presented in terms of current prices, suitable for cross-country comparison of levels of productivity for a single year and constant prices, suitable for analysis of productivity performance over a number of years.