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5.3 Labour productivity growth in OECD countries
Productivity growth rates in other OECD countries provide some indication about international technological innovation paths. Data are available from some OECD countries on constant-price value-added in major service industries between 1984 and 2001 and there is corresponding data on sectoral employment.
This information makes it possible to construct a weighted average LP index series for a group of seven OECD countries. The results are presented in table 5.4. The countries used and the relative weights given to them in constructing these estimates are:1
|
USA |
0.40 |
|
Canada |
0.10 |
|
France |
0.15 |
|
Denmark |
0.05 |
|
Finland |
0.05 |
|
Italy |
0.15 |
|
Spain |
0.10 |
|
Total |
1.00 |
These countries gave sufficient information on constant-price value-added of broad service sectors to calculate productivity changes according to the OECD industrial classification, which is close to first division ANZSIC.2 Average annual growth rates between 1984 and 2001 of service sectors in the seven countries are presented in appendix C. Table 5.4 shows the weighted average results.
|
|
1984 to 2001 |
1984 to 1993 |
1993 to 2001 |
|---|---|---|---|
|
|
% |
% |
% |
|
Electricity, gas and water supply |
2.73 |
2.50 |
2.99 |
|
Construction |
0.34 |
0.74 |
-0.11 |
|
Wholesale and retail trade; repairs |
2.26 |
1.74 |
2.84 |
|
Hotels and restaurants |
-0.02 |
-0.07 |
0.04 |
|
Transport and storage |
1.82 |
2.02 |
1.58 |
|
Post and telecommunications |
5.41 |
5.23 |
5.62 |
|
Financial except insurance |
1.84 |
1.14 |
2.64 |
|
Insurance |
1.53 |
1.17 |
1.93 |
|
Other community, social and personal servicesa |
-0.29 |
-0.19 |
-0.41 |
a This OECD category includes cultural and recreational services, which are not reported separately in the OECD STAN database. This category is used in the present statistical analysis to represent OECD cultural and recreational services.
Source: Appendix C, OECD (2003).
Comparing table 5.4 with table 4.1 reveals some strong similarities with the Australian results. In the selected OECD countries the strongest gains in LP occurred in infrastructure sectors, such as EGW and communications.3 Below average productivity growth was recorded in construction, hotels and restaurants and ‘other social/personal' services. Similar trends were evident in Australia.
The reason for the strong positive correlation between Australian and OECD productivity growth rates is not difficult to see. In the long run, productivity growth in Australia is driven by similar technological developments that drive productivity growth in other advanced industrialised countries.4 Therefore, the similarity in long-term productivity growth trends at the sectoral level is hardly surprising.
Given that there was no adequate information from abroad to allocate from main sectors into sub-industries, the study adopted the estimated productivity growth rates of three main sectors (that is, EGW, retail trade and transport) without change to their sub-industries. Table D.1 in the appendix shows the OECD data used in the regressions and correlations.
1 The weights are not directly proportional to country size, because observations for small countries contain significant information relevant to Australia.
2 The United Kingdom and Japan had to be excluded due to lack of sufficient data and Germany because of data consistency problems following unification. Korea was excluded for being a non-typical case, representing a ‘catching up' economy.
3 An exception is Canada, which recorded low productivity growth in electricity, gas and water (EGW), as shown in appendix C.
4 This is the reason that sectoral productivity growth rates in other OECD countries are classified as a technological variable.
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