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A comparison of productivity in France, Japan, the United Kingdom

and the United States over the past century

Gilbert Cette

Yusuf Kocoglu

Jacques Mairesse

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1. Goal of the Paper and method

2. Data

3. Long run trends1. Trends over the entire period

2. Trends by sub-periods

4. Trends over the 1980-2006 period

5. Conclusion

A comparison of productivity in France, Japan, the United Kingdom

and the United States over the past century

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1. Goal of the Paper and method comparison of productivity

• in France, Japan, the UK and the US• over the very long run (i.e. since 1890)• over the medium run (i.e. over the past 25 years)• scope : whole economy

based on the traditional “growth accounting” framework

examine and compare• levels and growth rates • of labour productivity, both per employee

and per hour, and of TFP

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2. Data use aggregate historical data series from different

sources (Maddison,…) ; for the past years, we use national accounts available

re-estimate the capital series for the four countries and the five products on the basis of the investment series

assume constant depreciation rates per investment product and constant global profit share

For ICT, same price estimates (relative to GDP price indices) for France, Japan and the United Kingdom as those in the United States

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3. Long run trends3.1 Trends over the entire period (1/5)

Productivity average annual growth, 1890-2006, in %

0

0,5

1

1,5

2

2,5

3

Labour productivity peremployee

Labour productivity per hour Total factor productivity

France Japan United Kingdom United States

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3. Long run trends3.1 Trends over the entire period (2/5)Increase in productivity level from 1890 to 2006 (1890=1)

0

5

10

15

20

25

30

35

40

Labour productivity peremployee

Labour productivity per hour Total factor productivity

France Japan United Kingdom United States

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3. Long run trends3.1 Trends over the entire period (3/5) Labour productivity per hour, as a % of the US level

0

20

40

60

80

100

120

140

1890 1913 1950 1973 1980 1990 2000 2006

France Japan United Kingdom

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3. Long run trends3.1 Trends over the entire period (4/5)

Same for TFP

Total factor productivity, as a % of the US level

0

20

40

60

80

100

120

140

160

180

200

220

1890 1913 1950 1973 1980 1990 2000 2006

France Japan United Kingdom

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3. Long run trends3.1 Trends over the entire period (5/5)

Labour hourly productivity level, PPP dollar 2000

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

1890 1895 1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

United States France Japan United Kingdom

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3. Long run trends3.2.Trends by sub-periods Average annual hourly labour productivity growth (in %) and contributions (in percentage points)

0

1

2

3

4

5

6

7

8

FR JP UK US FR JP UK US FR JP UK US FR JP UK US FR JP UK US

1890-1913 1913-1950 1950-1973 1973-1980 1980-2006

Capital intensity per hour Total factor productivity

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4. Trends over the 1980-2004 period Average annual hourly labour productivity growth (in %) and contributions (in percentage points)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

FR JP UK US FR JP UK US FR JP UK US FR JP UK US

1980-1990 1990-1995 1995-2000 2000-2006

Non ICT capital intensity per hour ICT capital intensity per hour Total factor productivity

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5. Conclusion (1/2)Some of the main results : Over the past 120 years

• substantial economic growth and productivity gains in the four countries

• France : remarkable catching up of the US productivity level, mainly for TFP

• Japan : impressive catching up process, stopped in the 1990s• UK : long term decline (1890-1950) followed by a catching up

process (1950-1995), mainly for TFP

The “Big Wave” • mainly explained in the four countries by TFP growth

• Top of the big wave : before WW2 in US, after in the three other countries

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Change of productivity leader• UK at the beginning of the 20th cent.

• US after

• No definitive leadership

In 2006 : • Hourly labour productivity : US = France > UK > Japon

• Productivity per employee : US > France > UK > Japon

• Total factor productivity : UK >= US >= France > Japon

These differences come from capital intensity and working time

ICT capital deepening• Acceleration in 1995-2000

• Slowdown in 2000-2006

5. Conclusion (2/2)