Productivity

Productivity is a measure of economic performance. It refers to the ratio between produced goods and the factors of production needed for this.

• 2.1 Labour productivity
• 2.2 Capital Productivity
• 2.3 Empirical Findings

Definition

General language definitions

In general productivity than the sum of productive activities of the economy and behavior is usually related to a system or a process with defined input and output. It is conceptually closely related to the constructiveness and the opposite of destructiveness.

National definitions

In economics is among the productivity (volume ) ratio between what is produced (output), and the means employed in the production process (production factors - input) understood:

Here, the output is given as the amount per unit time, that is regarded as a current value. The input can also be a current size, for example, the number of hours worked in a year or depreciation of the capital stock in a year. It can also be a stock size, for example, average number of persons employed in a year or average capital stock of a year.

Since the goods produced are of very different nature and may also alter the composition of production to different goods over time, still, it is necessary to evaluate the different goods with prices in order to specify the total output as one-dimensional size can. For this purpose, the assets are valued at market prices, where they exist. Goods for which there are no market prices are valued at production cost. Furthermore, are eliminated pure price change through price adjustment process in output. One method is about computing in constant prices of a base year.

The same evaluation problem arises also in the production factor capital, because the capital stock of various goods composed. When labor factor of production is, however, resorted to physical quantities such as the number of persons employed or number of hours worked.

The productivity can be divided according to the different factors of production:

Factor productivity

When determining factor productivity, the quantity of goods produced is compared to the quantity of a factor.

These so statistically measured productivities can not causally understood as one that about a rising labor productivity shows that the workers " diligent " and be that declining capital productivity shows that the capital brings less and less. Rather, rising labor productivity is a result of that per worker more and more " capital " meant actually are means of production are used. Typically, therefore, increases the long-term labor productivity, while the " capital " productivity is stagnant or even declining.

In the neoclassical theory, the assumption is that the factors of production are paid according to their productivity - which does not mean that this happens in practice. This may be due to market failures and externalities. Using the statistically measured productivities can be checked whether this is the case.

Labor productivity

The most popular and widely used factor productivity is labor productivity. This is mainly because the amount of labor input is easier to determine than about the wear or the stock of capital employed, ie machinery, buildings and ( in aggregate productivity considerations) infrastructure.

The economic formula for the labor productivity per hour worked is:

Labor productivity Pi = BIPreal / working volume = BIPreal / (Et * h )

Where BIPreal real gross domestic product, Et the number of employed persons and h is the number of hours worked per person in employment (see development of labor productivity ).

The economic formula for the labor productivity per worker is:

Labor productivity Pi = BIPreal / Et

Or labor productivity result = ÷ effort

Capital productivity

The Federal Statistical Office has made ​​a capital productivity by gross domestic product at constant prices (most recently in 1995 ) is in relation to the capital stock. The latter, gross fixed assets is also calculated in constant prices.

The addition of various types of capital to total capital stock is based on dubious assumptions, which have been criticized in the wake of the capital controversy.

Empirical Findings

According to the OECD, Economic Outlook no. 77, June 2005 is as follows to:

In OECD countries, roughly the industrialized countries, the potential output (production at normal capacity utilization of the capital stock ) is increased to 1992 an annual average of 1983 by 2.9%. This slowed slightly to an annual average of 2.6 % in 1993 to 2002.

Employment grew in these periods indicated an annual average of 2.4% and 1.1%. Employment growth has thus slowed down in the OECD.

For labor productivity, this results in approximately a 0.5% growth in the first and 1.5 % in the second period. Labour productivity growth has accelerated accordingly.

The capital stock grew an annual average of 3.7% and 3.1%, ie more rapidly than production. The capital productivity has been reduced accordingly, an annual average of 0.8 % from 1983 to 1993 and by 0.5 % in 1993 to 2002.

In general, the labor productivity increases in the medium and long term, while capital productivity is declining as here in the OECD countries. A notable exception is the U.S., for which the OECD indicates a growth of capital productivity from 1983 to 1992 by an annual average of 0.1 % and from 1993 to 2002 by 0.1 % also.

A long-term decline in capital productivity is problematic, as this means that the long-term overall economic return on capital ( capital income in relation to the capital stock ) can only be held if the share of labor income is reduced GDP, this course no later then would have an end, if this wage ratio had the value reaches zero.

Marginal productivity

Population and economic interest is in addition to the previously considered average productivity of factors and their marginal productivity:

This indicates by how much the output increases when the factor input increases by one unit, with constancy of the other factors. The marginal productivity of labor can be, for example, measured by the amount by which the output increases when an additional hour of work is done. Marginal productivities are of particular interest because they - determine the presence of perfect factor markets, the market price for the factor - according to theory. In general, after the value of marginal productivity. WGP = marginal productivity x output price. And the Optimum WGP is = price factor. To determine the Optimal factor quantity.

In most cases, one starts from a positive but diminishing marginal productivity, ie with an increase of the input, the output will rise. The amount of the increase is however less with increasing output level of the input.

Mathematically, the marginal productivity of a factor are calculated as the partial derivative of the production function for this factor.

Total factor productivity

Empirically, it can be observed that the growth of the output Y can be explained working capital A and K not only from the growth of inputs, but that it were a unexplained residual remains. This part of the growth rate of the Y, which can not be explained by changes in the amounts of A and K is referred to as total factor productivity. It can be interpreted as a measure of technical progress, which ensures independent of the use of production factors for growth of the output Y.

Development of labor productivity

Above, the equation of labor productivity is specified:

The absolute numbers of labor productivity are often less meaningful than the development of labor productivity relative to a base year. For this purpose, the above equation is divided for any year by a base year:

The data used are published by the German Federal Statistical Office and are in the WP under the headings of GDP and volume of work (abbreviated AV) to find. In addition, the annual increase in labor productivity () is specified.