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Paul V. Kern and Thomas M. Muth II
M ultifactor productivity, a measure relating output to the combined inputs of labor, capital, and intermediate purchases, remained constant, on average, between 1963 and 1991 in the metal stampings industry.1 (See Chart 1.) Many factors, such as new technology, changes in the skills and effort of the workforce, and economies of scale, influence trends in multifactor productivity.
Since 1985, the Bureau of Labor Statistics has published a labor productivity measure for the metal stampings industry.2 This article extends the Bureau's work by presenting a multifactor productivity measure for the industry.
Labor productivity in the metal stampings industry grew at an average annual rate of 0.9 percent over the 1963-91 period.3 As measured by output per employee hour, labor productivity comprises the effects of changes in capital per hour, intermediate purchases per hour (materials, fuels, electricity, and purchased business services), and multifactor productivity. The multifactor measure accounts for the influences of the capital and intermediate purchases in the input measure and does not reflect the impact of these influences on the productivity residual. It also allows analysts to quantify the effects on labor productivity of changes in capital relative to labor and of the intermediate purchases relative to labor.
This excerpt is from an article published in the May 1995 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 As discussed in the article, the metal stampings
industry is composed of three separate four digit industries with
standard industrial classification (SIC) codes 3465, 3466, and
3469. (See Standard Industrial Classification Manual
Executive Office of the President, Office of Management and
Budget, 1987), p. 191.
2 See Horst Brand and Clyde Huffstutler, "Trends of labor productivity in metal stamping industries," Monthly Labor Review, May 1986, pp.13-20.
3 All average rates of change presented in this article are compound rates.
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