In 1890, the level of labour productivity in the US was around four to five times higher than in Japan, 50% higher than in France, but 25% lower than in the UK. In 2006, hourly labour productivity levels were slightly higher in France than in the US, and noticeably lower in the UK (by roughly 10%) and even lower in Japan (30%), while TFP (total factor productivity) levels were very close in France, the UK and the US, but much lower (40%) in Japan. Gilbert Cette, Yusuf Kocoglu and Jacques Mairesse in their NBER paper on Productivity Growth and Levels in France, Japan, the United Kingdom and the United States in the Twentieth Century attempt to find out the reasons for the changes in productivity.
The first thing to note is the striking increase in productivity for all the four countries between 1890 and 2006.
The levels of productivity per hour increased by a factor of 20 in France, 40 in Japan, 9 in the UK and a factor of 12 in the US. The researchers write that, “Overall, it appears that the factors underlying TFP as computed, such as mainly a better educated and higher skilled labour force, technical and organizational changes, knowledge spillovers, better institutions, make a much greater contribution to observed productivity growth than capital deepening per se.”
Illustration: Jayachandran / Mint
Interestingly, much of the change can be attributed to the changes in the economic structure. For instance, despite the famed efficiency of the Japanese, their total factor productivity stopped at around 60% of the level of the US in the early 1970s and hourly productivity came to a halt in the early 1990s. Part of the reason is certainly the deflation in Japan since 1990.
The authors point out another reason—the fact that “low productivity activities, such as agriculture, construction, trade and catering account for a larger share of the economy than in the other three countries.” During a period of industrialization, however, capital deepening may be more important than other factors. In Japan between 1913 and 1950, it accounted for 70% of the growth in hourly productivity growth. Between 1950 and 1973 productivity growth was very high in France as a result of a significant decline in the share of agriculture in the economy.
Finally, the authors point out that the French worked 1,540 hours per head in 2006, compared with 1,710 hours for Americans, 1,610 hours for the British and 1,784 hours for the Japanese. Yet labour productivity per hour was the highest in France, followed by the US, the British and lastly the Japanese. All work and no play make Jack less productive than Jacques.
Years of Schooling, Human Capital and the Body Mass Index of European Females, by Giorgio Brunello, University of Padova, Danile Fabbri and Margherita Fort, University of Bologna. Paper published by Institute for the Study of Labour, Bonn
Life is not just about productivity but also about looking and feeling good.
Giorgio Brunello, Daniele Fabbri and Margherita Fort in their paper for the Institute of Study for Labour, Bonn, Years of Schooling, Human Capital and the Body Mass Index of European Females try to figure out whether education can help reduce obesity.
The researchers take advantage of the introduction of compulsory education to compare the body mass of samples before the reform with those after it.
Illustration: Jayachandran / Mint
Their conclusion: “We find that a 10% increase in the years of schooling—which corresponds in our sample to slightly more than one additional year at school—reduces the average BMI of females by 1.65 to 2.27%, and the incidence of overweight and obese females by 10% to 16% and by nearly 11% to 16% respectively.”
The authors say that since overweight and obese females in Europe have increased substantially between 1990 and now, their findings have a practical use. Adding one year of compulsory schooling is almost equivalent to rolling back the percentage of overweight females to its value in the early 1990s.
They also say that the impact of an extra year of education is highest among overweight females rather than obese ones.
In other words, higher education may be a good way of ensuring that you don’t become overweight later on in life. Forget jogging, read that book instead.