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March 2002, Vol. 125, No. 3

Bias in aggregate productivity trends revisited

William Gullickson and Michael J. Harper

This article updates results presented in our February 1999 Monthly Labor Review article, "Possible bias in aggregate productivity growth."¹  In it, we determined that manufacturing could account for all of the multifactor productivity (MFP) growth during the 1979–96 period within the private business sector. The article identified industries outside of manufacturing with negative MFP trends and assessed their effects on aggregate productivity. We concluded that the negative MFP trends seemed at least somewhat implausible and might have reflected service output measurement problems.

This article reprises the methodology, summarizes the earlier findings, and presents new results. Besides including data through 1997, the new results reflect the comprehensive revisions of the National Income and Product Accounts published by the Bureau of Economic Analysis (BEA) in October 1999. Aggregate productivity now is growing faster, and it is less clear that there is an aggregate bias, but we still find negative MFP trends for some of the same industries. For other industries, we find surprisingly low MFP trends. This is probably indicative of problems with the measurement of some service industry outputs. It may also reflect the rapid growth in high tech inputs, such as computers and semiconductors, used by these industries.

This excerpt is from an article published in the March 2002 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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Footnotes

1  This earlier article is available at http://www.bls.gov/opub/mlr/1999/02/art4full.pdf.

Related BLS programs

Multifactor Productivity

Related Monthly Labor Review articles

Possible measurement bias in aggregate productivity growth.—Feb. 1999.