American Economic Review Vol. 90 No. 2 2000
A Comparison of Industrial Productivity Growth in Canada and the United States
Abstract
This paper provides a consistent international comparison of the patterns of growth in Canadian and U.S. industries. While much previous work has been done comparing sectoral (total factor) productivity in these two countries, the methods are not entirely comparable. Our approach here is to use methods and definitions that are almost identical for the two countries and therefore to provide a better sense of the relative productivity performance of the two countries. Our methodology for international comparisons of growth in output, inputs, and productivity is based on the economic theory of production. We use measures of labor and capital that take into account the changing composition of the labor force and capital stocks (relatively more educated and older workers, and relatively more equipment compared to structures). We find that, during the 1961–1973 period, Canadian industries were able to bring their productivity levels closer to U.S. levels, and they also had a higher rate of output growth. However, the growth in output and productivity slowed down after 1973 in both countries. As a result, the gap in the level of productivity between the Canadian and U.S. industries has remained virtually unchanged since 1973. Looking closely at the sources of industrial output growth, we find that input growth is the predominant source of the growth for almost all industries in the two countries over the 1961– 1995 period. Productivity growth contributes, on average, only about 20 percent of the growth of industrial output in the two countries over this period.
- DOI
- 10.1257/aer.90.2.172
- Volume
- 90
- Issue
- 2
- Pages
- 172-175
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref