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December, 1986, Vol.
109, No.
12
Problems encountered in measuring
single- and multifactor productivity
The slowdown in productivity growth since the early 1970's in many countries has stimulated and renewed interest in the causes of productivity change. The observation that there has been a slowdown has generally centered on the traditional indicator of productivity—output per unit of labor input, or labor productivity.
Labor productivity—the relationship between output and labor input—has been the most prevalent measure of productivity for a variety of reasons. First, labor is involved in all aspects of production and generally has been the most important factor in the production process. Second, labor input is the most readily measurable of the various production factors.
Labor productivity measures are useful in that they provide quantitative indicators of the amount of change in labor expended to produce real goods and services of an enterprise, industry, or economy. Changes in output per hour, however, do not measure the specific contribution of labor or any other factor of production. Instead, they reflect the joint effects of many influences which affect the use of labor, including changes in technology, capital investment, utilization of capacity, economies of scale, energy substitution, organization of production, and managerial skills, as well as changes in the characteristics and efforts of the work force.
This excerpt is from an article published in the December 1986 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Related BLS programs
Industry Productivity
Multifactor Productivity
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