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Labor Productivity

What is 'Labor Productivity'

Labor productivity is a measure of economic growth within a country. Labor productivity measures the amount of goods and services produced by one hour of labor; specifically, labor productivity measures the amount of real gross domestic product (GDP) produced by an hour of labor. Growth in labor productivity depends on three main factors: investment and saving in physical capital, new technology, and human capital.

Explaining 'Labor Productivity'

Labor productivity is defined as real economic output per labor hour. Growth in labor productivity is measured by the change in economic output per labor hour over a defined period of time.

The Importance of Measuring Labor Productivity

Labor productivity is directly linked to improved standards of living in the form of higher consumption. As an economy's labor productivity grows, it produces more goods and services for the same amount of relative work. This increase in output makes it possible to consume more of the goods and services for an increasingly reasonable price.


Further Reading


The great recession and delayed economic recovery: A labor productivity puzzle?
books.google.com [PDF]
… The positive link between the real wage and labor productivity is well anchored in economic theory … Table 1. Correlation Between the Real Wage Growth and the Labor Productivity Growth … Utilities Construction Trade Transport Finance _ Services R. wage growth (GDP def) …

Industrial Agglomeration and Difference of Regional Labor Productivity: Chinese Evidence with International Comparison <span style=[J]' src='/thumbnails/?img=http%3A%2F%2Fen.cnki.com.cn%2FArticle_en%2FCJFDTotal-JJYJ200611007.htm' />Industrial Agglomeration and Difference of Regional Labor Productivity: Chinese Evidence with International Comparison [J]
en.cnki.com.cn [[J]' href='https:/api.miniature.io/pdf?url=en.cnki.com.cn%2FArticle_en%2FCJFDTotal-JJYJ200611007.htm'>PDF]
… The positive link between the real wage and labor productivity is well anchored in economic theory … Table 1. Correlation Between the Real Wage Growth and the Labor Productivity Growth … Utilities Construction Trade Transport Finance _ Services R. wage growth (GDP def) …

The effects of real wages and labor productivity on foreign direct investmentThe effects of real wages and labor productivity on foreign direct investment
www.jstor.org [PDF]
… The positive link between the real wage and labor productivity is well anchored in economic theory … Table 1. Correlation Between the Real Wage Growth and the Labor Productivity Growth … Utilities Construction Trade Transport Finance _ Services R. wage growth (GDP def) …

Labor productivity of services sector in Malaysia: Analysis using input-output approachLabor productivity of services sector in Malaysia: Analysis using input-output approach
www.sciencedirect.com [PDF]
… The positive link between the real wage and labor productivity is well anchored in economic theory … Table 1. Correlation Between the Real Wage Growth and the Labor Productivity Growth … Utilities Construction Trade Transport Finance _ Services R. wage growth (GDP def) …

On finance as a theory of TFP, cross‐industry productivity differences, and economic rentsOn finance as a theory of TFP, cross‐industry productivity differences, and economic rents
onlinelibrary.wiley.com [PDF]
… The positive link between the real wage and labor productivity is well anchored in economic theory … Table 1. Correlation Between the Real Wage Growth and the Labor Productivity Growth … Utilities Construction Trade Transport Finance _ Services R. wage growth (GDP def) …

The direct impact of climate change on regional labor productivityThe direct impact of climate change on regional labor productivity
www.tandfonline.com [PDF]
… The positive link between the real wage and labor productivity is well anchored in economic theory … Table 1. Correlation Between the Real Wage Growth and the Labor Productivity Growth … Utilities Construction Trade Transport Finance _ Services R. wage growth (GDP def) …

Lack of access to external finance and SME labor productivity: does project quality matter?Lack of access to external finance and SME labor productivity: does project quality matter?
link.springer.com [PDF]
… The positive link between the real wage and labor productivity is well anchored in economic theory … Table 1. Correlation Between the Real Wage Growth and the Labor Productivity Growth … Utilities Construction Trade Transport Finance _ Services R. wage growth (GDP def) …



Q&A About Labor Productivity


How is output measured on a per-hour basis?

Output is measured on a per-hour basis by dividing total hours worked by total production output.

How is real gross domestic product (GDP) defined?

Real GDP measures the value of all final goods and services produced in an economy during a given period, adjusted for price changes.

What does labor productivity measure?

Labor productivity measures the amount of goods and services produced by one hour of labor.

What is labor productivity?

Labor productivity is a measure of economic growth within a country.

What are three main factors that affect labor productivity?

Investment and saving in physical capital, new technology, and human capital.