Editors’ Overview
We are pleased to feature in the 41st issue the International Productivity
Monitor a symposium on the relationship between productivity and pay, an important topic the journal has addressed on many previous occasions. The contributions in this symposium provide up-to-date estimates on this relationship for
the United States, the United Kingdom and Canada. In addition, they offer new
and original interpretations of what is driving the gap between productivity andpay, and the different ways it has manifested itself across those three economies.

The first article of the symposium byJacob Greenspon, Anna Stansbury
and Lawrence H. Summers provides asation of self-employed workers for theiractivities because of the relatively large
share of “solo self-employed” and a large

comparative perspective between Canada
and the United States. The authors makefall in hours worked by the self-employed.
The third article by Lawrencea distinction between two sources of thegap between productivity and pay: divergence which measures the degree to which

Mishel and Josh Bivens provides complementary arguments to the observationin the first article that factors which areproductivity has grown faster than pay,and delinkage which refers to the degree
to which incremental increases in the rate

independent to productivity growth havebeen driving productivity and typical pay
in the United States further apart. Ex-of productivity growth translate into incremental increases in the rate of growthof pay. The authors find that while di-cessive unemployment, eroded collective
bargaining, and corporate-driven globalization explain more than half of the di-vergence has occurred in both countries,
there has been little delinkage as periodsof faster productivity growth also saw anvergence according to the authors, wherea diminished overtime salary threshold,employee misclassification, employer-increase in pay. This implies that proproductivity policies tend to raise middle

imposed noncompete agreements, andcorporate fissuring-subcontracting andmajor-buyer dominance also explain aclass incomes.
The second article by Andreas Teichgräber and John Van Reenen finds

fair component.
The final article in the symposium bymuch less of a decoupling between productivity and median wages in the United
Kingdom than other studies have foundAndrew Sharpe and James Ashwellshows that the gap between productivity
and real median wage growth in Canada

for the United States. The divergence
they do find is largely explained by rising wage inequality and to a lesser extent

has fallen quite considerably since 2000.
They argue that the bargaining power ofworkers fell dramatically in the last quar-

by a rise in non-wage compensation costs.
The authors also address the relatively
large role of lower increases in compen-ter of the 20th century due to high unemployment, falling unionization rates and arising import share, but that since 2000

INTERNATIONAL PRODUCTIVITY MONITOR

1trends in these factors have reversed orwork in PWT is a useful guide to distin-stabilized since.
Together the four articles in this symposium provide good and bad news forguishing outliers from regular patterns in
the data.
The dispersion of productivity within

the majority of wage earners in the threecountries under consideration. On thepositive side, productivity remains a key

industries has been a key topic for productivity researchers, as the issue is pervasive across countries, industries anddriver of earnings. However, on the negative side, the link between productivity
and pay is often affected by other fac-time. The article by Cindy Cunningham, Sabrina Wulff Pabilonia, JayStewart, Lucia Foster, Cheryl Grim,

tors, not directly related to pay, but due
to institutions, labour market imperfec-

John Haltiwanger and Zoltan Wolf
uses new dispersion measures on productivity in US manufacturing industries, de-tions and political preferences regarding
income policies, taxation, etc. Restoring
the link could also be an important in-scribing how periods of innovation are initially associated with a surge in businesscentive for reverse causality, namely thathigher wages could provide an incentive
to productivity.

start-ups, followed by increased experimentation that leads to rising dispersion
potentially with declining aggregate pro-For decades the Penn World Table(PWT) has been a widely used data resource on comparative measures of prices

ductivity growth, and then a shakeout
process that results in higher productivity growth and declining productivity dis-and income levels. In the most recentversions of PWT, starting with 8.0, measures of output and productivity havepersion.
In the Spring 2021 issue of the International Productivity Monitor, we pub-also been introduced, and the last version 10.0 now includes such time series
for 183 economies from 1950 to 2019.

lished a review article by Bert Balk of
the volume Measurement of Productivity and Efficiency: Theory and Practice

Surprisingly, in the latest version, several less developed countries have a to-by Robin Sickles and Valentin Zelenyuk. In a response to this review

tal factor productivity (TFP) level well
above that of the United States. The
article by Robert Inklaar and Pieter

article, the authors explain how the material they cover in the first seven chapters of their book builds on and expands

Woltjer discuss the case of Egypt, whichin 2017 had a TFP level 123 per centthat of the United States. They tracein important ways Balk’s own book, Industrial Price, Quantity, and Productivity Indices: The Micro-Economic Theory

this anomalous outcome to the underlying measurement and modelling issues oncomparative inputs. The authors argueand Applications on Productivity, which
was published more than twenty years
ago.

that the development accounting frame-2

NUMBER 41, Fall 2021