1 Using National Accounts Data for Productivity Analysis François Lequiller OECD

2 Objectives of the paper Promote the use of national accounts data on labour input for productivity analysis The paper –makes several recommendations regarding the transmission of data to OECD/Eurostat –Proposes a model questionnaire on the bridge table between labor force statistics and national accounts data on employment

3 Productivity comparisons in the OECD To compare productivity growth is easier than to compare productivity levels (PPPs…) However, international users want to compare levels Example: EU countries have set benchmark to the US in terms of levels (Lisbon objectives) Canada and US productivities are compared in levels OECD disseminates data on productivity levels

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5 Decomposition of GDP per capita GDP/Population = (GDP/total hours worked) * (total hours worked/persons employed) * (persons employed/labour force) * (labour force/working age population) * (working age population/population) Definition of labour productivity = GDP/total hours worked, in preference to GDP/persons employed Reason: total hours worked vary a lot between OECD countries

6 Limitations to GDP/total hours worked Does not take into account differences in the composition of the work force Difficulty to measure the non market sector UK Atkinson report Productivity of business sector better measured But current limitation of the international data available on business sector

7 Use of national accounts data The numerator of labour productivity is GDP It is natural that the denominator, the measure of labour input, is consistent with numerator Recommendation 1: national accounts data should be used to compile the denominator of labour productivity Recommendation 2: standard national accounts tables should allow for the calculation of the productivity of the non farm market sector Market = Total – NPISH – General Government – Owner occupied housing

8 Conditions to use national accounts data First condition: total hours data in the framework of national accounts should be compiled by countries and transmitted to the OECD Second condition: they should be comprehensive and consistent with GDP (coverage of self-employed, underground economy, domestic concept) Third condition: they should be comparable between countries

9 Availability of national accounts data See Table 2, page 6 Most OECD countries transmit data on employment However, some transmit numbers in terms of jobs, while the majority transmits data in terms of persons Only very few countries transmit data on total hours Some transmit data on total hours for employees but not for self- employed

10 Improve international availability of data on total hours Recommendation 3: OECD countries should report systematically total hours for employees and self-employed The concept of full-time equivalent is being abandonned Recommendation 4: SNA should be clarified to avoid excluding the concept of « persons ». ESA could be used as an input to precise what is in or out of labor input. Paris Group (labour force statistics experts) are discussing of a new ILO resolution on working time measurement. Could lead to some precisions in the SNA paragraphs that refer to the old resolution. Recommendation 5: OECD countries should report data in terms of persons as well as in terms of jobs.

11 Comparability with labour force statistics See table 3, page 9 (employment) See table 4, page 10 (hours worked) Significant differences with original source Some differences can be explained Example: US: jobs (NIPA, from CES) versus persons (CPS) Example: Italy: partially underground economy More information is needed to better understand and to check that national accounts adjustments are comparable

12 From a pilot test to a questionnaire Objective: better understand the bridge table between original labour force sources and national accounts data France and Canada have accepted to describe this bridge table Based on this experience, Eurostat and OECD propose a questionnaire quantifying the adjustments made The two pilot countries are illustrative: –France: uses mainly Census, administrative data and business surveys and introduces corresponding adjustments –Canada: uses mainly LFS, and introduces corresponding adjustments

13 OECD/Eurostat questionnaire Objective: explain and quantify the differences between the main labor force statistics and the NA estimates Start from the labour force statistics –For persons/jobs –For hours worked Quantify each adjustment

14 OECD/Eurostat questionnaire Quantify adjustments for employment –From stocks to flows (averaging) –From persons/jobs to persons/jobs –Adjustments for coverage Military Other collective households Territories Residents working outside (-) Non residents working inside (+) –Unobserved economy –Other

15 OECD/Eurostat questionnaire (ctd) Quantify the adjustments introduced for hours worked –For annual leaves and holidays –For sickness leaves –For strikes and temporary lay-offs –For paid but unreported overtime –For unpaid overtime

16 Conclusion The objective is to be able in end 2005: –To use at OECD national accounts based numbers for the denominator of the headline labour productivity level number –To be able to explain the source of the data, their difference with labour force statistics, and their international comparability Comments on the recommendations and on the questionnaire are welcome.