1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Aggregate multi-factor productivity

Measurement issues in OECD countries

This paper analyses for 34 OECD countries the extent to which the calculation of aggregate multi-factor productivity (MFP) is sensitive to alternative parameterisations. The starting point is the definition of MFP used in previous work in the OECD’s Economics Department (e.g. Johansson et al. 2013). They include alternative MFP measures, with human capital included or excluded, with different measures of Purchasing Power Parity (PPP) exchange rates, using time-varying capital depreciation rates and different measures of capital stock and labour input (headcount against hours worked). The main result of the paper is that whether or not human capital is included in MFP makes a significant difference for the level and dynamics of MFP. At the same time, MFP measures are less sensitive to other parameters of the calculation.

English

Keywords: multi-factor productivity, human capital, measurement, OECD
JEL: C23: Mathematical and Quantitative Methods / Single Equation Models; Single Variables / Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models; O4: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity; L51: Industrial Organization / Regulation and Industrial Policy / Economics of Regulation; J2: Labor and Demographic Economics / Demand and Supply of Labor; L43: Industrial Organization / Antitrust Issues and Policies / Legal Monopolies and Regulation or Deregulation; C51: Mathematical and Quantitative Methods / Econometric Modeling / Model Construction and Estimation
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