Productivity:

An International 

Perspective

U.S. DEPARTMENT OF LABOR 

Bureau of Labor S tatistics

Bulletin 1811

1974

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Productivity:

An International 

Perspective

Bulletin 1811

Prepared by the 

Bureau of Labor Statistics 

for the National Commission 

on Productivity

U.S. DEPARTMENT OF LABOR 

Peter J. Brennan, Secretary

Bureau of Labor Statistics 

Julius Shiskin, Commissioner 

1974

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, GPO Bookstores, or

BLS Regional Offices listed on inside back cover. Price $1.25 Stock Number 2901-01333

Make checks payable to Superintendent of Documents.

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Users of this chartbook interested in keeping abreast of current information on U.S. and

foreign productivity can find up-to-date statistics on productivity and related subjects in publications of the Bureau of Labor Statistics. Data for the U.S. economy can be found in the Quarterly

Review of Productivity and Costs, as well as in the monthly Chartbook on Prices, Wages, and

Productivity. Data for foreign countries are contained in the Handbook of Labor Statistics and

in occasional reports and releases by the Bureau. These reports are free and are available on

request from the Bureau of Labor Statistics. Many of the U.S. and foreign series are published

and analyzed from time to time in the Monthly Labor Review, which is available by subscription

from the Superintendent of Documents or from any of the BLS regional offices, listed on the

inside back cover.

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Preface Productivity is a key element influencing many economic variables and the attempt to

increase productivity is a major objective of most governments. The differential rates of productivity growth experienced by the developed countries in the last two decades have led to major

shifts in relative economic strength and have affected living standards, costs, prices, industrial

structures, trading patterns, and international monetary arrangements. Information on productivity

in the international area and the factors influencing its growth is, therefore, essential for appropriate policy formulation.

This chartbook is designed to provide reasonably consistent data that will permit international comparisons of productivity trends and levels along with related factors for selected

countries. The first part covers the basic information on productivity trends and levels; the second

and third show how differences in productivity affect costs and living standards; the fourth traces

trends in various sources of productivity growth. In general, the countries examined are the major

developed countries-those with which the United States has the greater part of its trade relationships

though a few less developed countries are sometimes included.

International comparisons often lack the precision usually associated with comparable U.S.

measures. Small differences, therefore, may not be significant; however, broad movements should

provide reasonably valid indications. A brief explanation of some of the recurring statistical

problems is included in Appendix A. Supplementary information on specific problems has also

been included in both the textual material and notes to selected tables.

This chartbook was prepared for the National Commission on Productivity. The Commission

was established by the President in 1970, and was given a statutory basis by Congress in 1971.

Composed of business, labor, government, and public leaders, the Commission develops and promotes programs and policies designed to improve U.S. productivity. One such program is the

dissemination of information about productivity and its implications.

The chartbook was prepared in the Office of Productivity and Technology of the Bureau of

Labor Statistics under the general direction of Jerome A. Mark, Assistant Commissioner. It was

designed and written by Martha Farnsworth Riche under the direction of Chester Myslicki. Arthur

Neef and staff, under the direction of John H. Chandler, Chief, Division of Foreign Labor Statistics, provided basic data and contributed to the analysis. Edgar Weinberg, Assistant to the

Executive Director, planned the report on behalf of the National Commission on Productivity.

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Trends in real GNP per employed civilian ............................................................................................................... 2

Comparative levels of real GNP per employed civilian .......................................................................................... 4

Trends in output per employed civilian by secto r.................................................................................................. 6

Levels of food production per person in the farm population ............................................................................ 8

Productivity trends in manufacturing .................................................................................................................... 10

Trends in output per man-hour, output, and man-hours in manufacturing .................................................... 12

Productivity in the iron and steel industry ............................................................................................................ 14

Trends in output per man-hour, output, and man-hours in the iron and steel in d u stry ................................. 16

P A R T II. Im plications o f productivity growth fo r costs and prices ......................................... 19

Trends in output per man-hour, compensation per man-hour, and unit labor costs in manufacturing:

1960-72 ............................................................................................................................................................. 20

1960-65 ............................................................................................................................................................. 22

1965-70 ............................................................................................................................................................. 24

1970-72 ............................................................................................................................................................. 26

Levels of output per man-hour, unit labor costs, and hourly labor costs in the iron and steel industry . . 28

Compensation in manufacturing and selected industries .................................................................................... 30

Trends in consumer prices .......................................................................................................................................... 32

Trends in the GNP implicit price deflator ............................................................................................................... 34

P A R T III. Im plications o f pro d u ctivity growth fo r living s ta n d a rd s ......................................... 37

Comparative levels of real GNP per capita ............................................................................................................ 38

Trends in real hourly earnings .................................................................................................................................. 40

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The structure of consumer expenditures .............................................................................................................. 42

Trends in unemployment ......................................................................................................................................... 44

School enrollments and education expenditures ................................................................................................. 46

The contribution of productivity to economic growth ...................................................................................... 48

PART IV. Factors affecting productivity growth................................................................................. 51

Labor

Population, labor force, employment, and unem ploym ent................................................................................. 52

Trends in the industrial structure of employment .............................................................................................. 54

Trends in the sex composition of the labor force ................................................................................................. 56

Capital

Capital investm ent........................................................................................................................................................ 58

Some sources of agricultural productivity............................................................................................................... 60

Technology

Trends in the diffusion of major technological innovations .............................................................................. 62

Research and development: employment and expenditures .............................................................................. 64

Objectives of government research and development expenditures ................................................................. 66

Trends in patent activity ............................................................................................................................................. 68

Energy consumption .................................................................................................................................................. 70

APPENDIXES

A. Supporting tables for charts ............................................................................................................................... 72

B. Sources..................................................................................................................................................................... 79

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P A R T I.

Productivity

Measures

Productivity is a concept that expresses the relationship between the quantity of goods

and services produced-output-and the quantity of labor, capital, land, energy, and other resources

that produced it-inputs. Basically, productivity can be measured in two ways. One way relates

output to a single input such as labor or capital, while the other relates output to a composite

of inputs, combined to reflect their relative importance. The latter type of measure is more

comprehensive, but it is almost impossible to obtain, in view of the problem of identifying and

measuring all inputs. For this and other reasons, the most commonly used measure of productivity

relates output to a single input-labor.

One reason for choosing a labor productivity measure is that labor input is more readily

measurable than other inputs. In addition, labor is the largest cost factor in the economy. Nevertheless, measures of output per man-hour or output per employee in no way imply that labor

effort is solely or primarily responsible for productivity growth. In a technologically advanced

society, productivity growth also reflects technological innovation, changes in capital stock and capacity utilization, scale of production, materials flow, management skills, the state of labor relations,

competitive pressure, and many other factors whose contribution often cannot be measured

separately.

The output side of the output per man-hour or output per employee ratio refers to the final

products and services of an entire national economy (including government) or the amount of

value added by an enterprise, industry, or sector. Since few of these entities produce a single

homogeneous commodity that can be measured by simply counting the number of units produced,

the various units of output must be combined on some common basis-either their unit labor

requirements in a base period or their unit value. When the number of units produced is not

known, as is often the case, output must be expressed in terms of the appropriate national

currency, adjusted for price changes whenever necessary. Official U.S. data on productivity

exclude general government. For this report, government has been included in both the output

and input side for consistency with the other country measures.

Productivity comparisons can be made along two dimensions: the level of productivity in

different countries at a given time, or the trend in productivity in different countries over a

period of time. Both dimensions provide useful information and illuminate each other when

studied simultaneously. For instance, as the charts in this book show, productivity has been

growing at a relatively slow rate in the United States in recent years, but the overall level of

U.S. productivity still surpasses the level attained in other developed countries.

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Trends in Real GNP 

per Employed 

Civilian

At the national level, productivity measures are derived from the gross national product (GNP)-

expressed in real terms by removing the effect of price changes-and the corresponding civilian employment. Although man-hours are a more meaningful measure of labor input than employment,

man-hour indexes are not available for most of the countries compared. Consequently, consistent

productivity comparisons can only be made on the basis of GNP per employee.1

The rate of change in real GNP per employee between 1950 and 1972 varied substantially

among the countries compared. Productivity grew slowly in Canada, the United States, and the

United Kingdom in comparison with the other countries, especially Japan.

Growth rates varied within this period. The highest rates for the United States spanned the

recession-free years of 1960 through 1965. Japan's rate of productivity growth accelerated over

the period.

These rates of change are based on each country's own combination of its products by its

own set of prices. If the other countries had used U.S. prices to calculate their national output,

their rates of growth of real GNP per employee would probably have been slightly lower.

Country

Average annual percent change in

real GNP per employed civilian

1950-72 1950-60 1960-65 1965-72

United States 2.2 2.1 3.2 1.5

Canada 2.6 2.8 2.7 2.2

France 4.8 4.6 5.2 4.7

Germany 5.4 6.8 4.3 4.4

Italy 5.4 5.2 5.9 5.4

Japan 8.0 6.6 8.7 9.4

United Kingdom 2.4 2.1 2.4 2.8

^Output per man-hour changes for the U.S. private economy averaged out at 2.9 percent for the 1950-72

period. The comparable measure for output per employed civilian for the private economy was 2.5 percent.

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Chart 1.

Real GNP per Employed Civilian, 1950-72

JAPAN

ITALY

GERMANY

FRANCE

CANADA

UNITED KINGDOM

UNITED STATES

1950 1955 1960 1965 70 71 72

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Comparative Levels 

of Real GNP per 

Employed Civilian

Higher rates of change in productivity over a limited time span may not signify higher

productivity levels in one country compared to others if the more rapidly advancing country

starts off at a relatively low level. Productivity levels are difficult to ascertain and ideally require

periodic wide-scale investigations of a complex nature. The best available evidence suggests that

the United States still has the highest level of productivity, even though the gap between the United

States and many of the countries compared narrowed significantly between 1950 and 1972. Japan

gained the most over the period, yet its estimated level of productivity in 1972 was among the

lowest of the countries compared. Alternative estimates for the United Kingdom suggest that its

productivity level may be understated.

As indicated in Appendix A, no use was made of official exchange rates to convert GNP

expressed in foreign currencies into U.S. dollars. Such a procedure is inappropriate and would

lead to extremely erratic movements from year to year.

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Chart 2.

Real GNP per Employed Civilian, 1950-72

Indexes, United States = 100

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Trends in Output 

per Employed 

Civilian by 

Sector

In all the countries analyzed, productivity has grown faster in agriculture than in industry

(mining, manufacturing, and construction) and faster in industry than in services during the past two

decades.

The rate of productivity growth for the economy as a whole reflects not only productivity

changes in the component sectors, but also shifts of employment between sectors with different

levels of productivity. In this sense, the shift of employment into industry from agriculture, where

productivity levels are relatively low, has contributed to the rise in the overall rate, and shifts into

services have tended to moderate it.

Output measures for the services sector-especially for the government component-are admittedly weak, which seriously affects international comparisons for this sector. This weakness will also

affect, though to a lesser extent, comparisons at the level of the total economy as well.

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Chart 3.

Output per Employed Civilian, by Sector, 1950-71

(Average Annual Rate of Change)

11955-71

21951-71

TOTAL

1........... **M*

AGRICULTURE

* r

2 3 4 5 6

Percent

UNITED STATES

CANADA

FRANCE1

GERMANY

IT A L Y 2

UNITED KINGDOM

INDUSTRY

li.v l.' j.' ii.'

■ r - v - v . v . i .

SERVICES

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Levels of Food 

Production per 

Person in the Farm 

Population

The average person tends to regard developed countries as leaders in industry and to think of

developing countries as suppliers of raw materials and agricultural produce. However, the rough

estimates available clearly show the advantages the United States has over other major economic

areas in food production per person in the farm population. In 1970, Western Europe was at a

level about one-fifth that of the United States. Other developed countries were at less than 10 percent of the U.S. level and the developing countries and Communist Asia at about 1 percent. This

differential allowed the United States, where less than 5 percent of the population are on the farm,

to enjoy a higher standard of Jiving with respect to food than the developing countries, where over

60 percent of the population are on the farm.

The world level is affected primarily by the data for the less developed countries, as more

than 90 percent of the world farm population reside in these areas.

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Food Production per Person in the Farm Population, 1970

Indexes, United States = 100

UNITED STATES

WESTERN EUROPE

OTHER

DEVELOPED COUNTRIES

LESS

DEVELOPED COUNTRIES

COMMUNIST ASIA

WORLD

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Productivity Trends 

in Manufacturing

Growth in manufacturing productivity between 1960 and 1972 varied substantially among the

countries whose productivity is compared regularly by the Bureau of Labor Statistics. Between 1960

and 1972, average annual gains in output per man-hour ranged from 3.2 percent in the United States

to 10.4 percent in Japan.

The largest spread in productivity growth rates among the countries compared existed between

1965 and 1970; during this period, manufacturing productivity grew 2.0 percent a year in the United

States and 13.4 percent a year in Japan. The economic recovery that began late in 1970 brought

about a substantial improvement in U.S. productivity growth: Though productivity still grew at a

faster rate in some of the other countries between 1970 and 1972, the margins by which these rates

exceeded the U.S. rate were reduced significantly.

Output per man-hour measures for manufacturing in the past were often limited to production

worker man-hours. These latter rates tend to be higher than the comparable rates for all persons in

the United States and most of the countries studied in this report.

Country

Average annual percent change in output per

man-hour in manufacturing

1960-72 1960-65 1965-70 1970-72

United States 3.2 4.3 2.0 6.2

Canada 4.2 4.4 4.4 5.0

European Economic

Community (5 countries) 6.0 5.9 6.1 6.0

Belgium 6.5 5.1 7.7 7.3

France 5.9 4.9 6.5 6.0

Germany 5.8 6.4 5.6 6.0

Italy 6.1 6.8 5.3 5.6

Netherlands 7.1 5.2 8.5 6.5

Japan 10.4 8.5 13.4 6.8

Sweden 7.3 7.6 7.5 5.2

United Kingdom 4.0 4.1 3.7 5.6

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Output per Man-Hour in Manufacturing, 1960-72

Indexes, 1960 = 100

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Output changes in manufacturing among all the industrial countries reviewed were more

volatile than productivity movements. For all the countries on the European continent, however,

the range within which output rates and productivity rates fell was relatively narrow.

Man-hour changes ranged from modest increases where output rates exceeded productivity to

_ _ _ modest declines where productivity exceeded output.

and Man-Hours in 

Manufacturing

Trends in Output per 

Man-Hour, Output,

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Chart 6.

Output per Man-Hour, Output, 

in Manufacturing, 1960-72

(Average Annual Rate of Change)

OUTPUT PER MAN-HOUR

UNITED STATES

BELGIUM

CANADA

FRANCE

GERMANY

ITA LY

JAPAN

NETHERLANDS

SWEDEN

UNITED KINGDOM

Percent

12

and Man-Hours

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Productivity in the 

Iron and Steel 

Industry

Productivity growth in the U.S. iron and steel industry lagged behind the rates attained in

other major steel-producing countries between 1964 and 1972. In 1964, output per man-hour was

about 60 percent of the U.S. level in Germany and about 50 percent in France, Japan, and the

United Kingdom. In 1972, though labor productivity in the British steel industry was still only

about half the U.S. level, the French industry was up to two-thirds the U.S. level, the German to

about four-fifths, and the Japanese appear to have exceeded it.

A significant determinant of the variation in productivity rates is the variation in output

growth. Japanese iron and steel output more than doubled in 8 years, while U.S. output grew less

than 5 percent and United Kingdom output declined. Iron and steel output in France and Germany

increased more than 20 percent over the period.

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Chart 7.

Relative Levels of Output per Man-Hour 

in the Iron and Steel Industry, 1964-1972

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trends in Output 

per Man-Hour, 

Output, and 

Man-Hours in the 

Iron and Steel 

Industry

Variation among countries in rates of iron and steel output for the 1964-72 period was an

important determinant of productivity change. Japan had a substantial lead in rates of output and

output per man-hour. Both the United States and the United Kingdom experienced decreasing output and low productivity gains.

Employment levels dropped in 4 out of 5 countries and barely increased in Japan.

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Chart 8.

Output per Man-Hour, Output, 

and Steel Industry, 1964-72

(Average Annual Rate of Change)

OUTPUT PER MAN-HOUR

Percent

-3

and Man-Hours in the Iron

OUTPUT

Percent

MAN-HOURS

-3 0 3

Percent

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PART II. Implications 

of Productivity 

Growth for Costs 

and Prices

Productivity movements have an important influence on cost and price stability. This aspect

of productivity change stems from the fact that output per man-hour is a critical link between the

cost of labor and the price of goods.

In many industries, labor costs, including hourly rates of pay, overtime, and all types of fringe

benefits, are the largest element in the value added by the industry. Consequently, the trend of

labor costs per unit of output plays a major role in determining price changes. If the effect of an

increase in hourly compensation can be minimized by a large increase in productivity, pressure to

increase prices will be lessened, although increases in profits or materials costs per unit may partially or wholly offset this effect.

In turn, prices affect costs. Those price increases which are attributed to demand increases

tend to boost costs, as producers are now able to compete more vigorously for labor and materials.

At the international level, relative cost changes are of great importance. If costs go up more

in one country than in others, the resultant impact on exports and imports can worsen that country's international reserve position and lead to pressures to devalue its currency. Governments may

try to offset the influence of cost differentials by granting subsidies and raising tariffs.

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Trends in Output 

per Man-Hour, 

Compensation per 

Man-Hour, and Unit 

Labor Costs in 

Manufacturing, 

1960-72

Unit labor costs in manufacturing, expressed in terms of U.S. dollars, rose about 2 percent

a year in the United States, Canada, and the United Kingdom between 1960 and 1972. Increases in

unit labor costs in manufacturing in the other countries ranged from 2.7 percent in France to 5.4

percent in the Netherlands over the same period. The relatively small rise in unit labor costs in

the United States and Canada was primarily due to relatively lower rates of increase in hourly compensation; in the United Kingdom, it also reflected the currency devaluation. Taking the 1960-72

period as a whole tends to obscure divergent movements; therefore, three subperiods are shown in

the following charts.

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Output per Man-Hour, Compensation per Man-Hour, 

and Unit Labor Costs in Manufacturing, 1960-72

(Average Annual Rate of Change)

^^COMPENSATION PER MAN-HOUR

UNIT LABOR COSTS

NATIONAL CURRENCY

UNITED STATES us.' DOLLARS

BELGIUM

CANADA

FRANCE

GERMANY

ITA LY

JAPAN

NETHERLANDS

SWEDEN

UNITED KINGDOM

15 10

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Trends in Output per 

Man-Hour, 

Compensation per 

Man-Hour, and Unit 

Labor Costs in 

Manufacturing,

Between 1960 and 1965, unit labor costs in manufacturing declined in the United States

and Canada. Gains in productivity in these countries, though relatively low, were still sufficient to

more than offset the relatively small increases in compensation per man-hour. Compensation per

man-hour grew much more in the other countries compared.

1960-65

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Output per Man-Hour, Compensation per Man-Hour, 

and Unit Labor Costs in Manufacturing, 1960-65

(Average Annual Rate of Change)

IOUTPUT PER MAN-HOUR

ICOMPENSATION PER MAN-HOUR

5 10

Percent

UNITED STATES

BELGIUM

CANADA

FRANCE

GERMANY

ITALY

JAPAN

NETHERLANDS

SWEDEN

UNITED KINGDOM

5 -5

UNIT LABOR COSTS

■ n a t io n a l c u r r e n c y

Ej u .s. d o l l a r s

10

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Trends in Output 

per Man-Hour, 

Compensation per 

Man-Hour, and Unit 

Labor Costs in 

Manufacturing, 

1965-70

Unit labor costs in manufacturing, measured in national currencies, rose more in the United

States between 1965 and 1970 than in Canada, Japan, or Western Europe. Hourly compensation

rose over 6 percent a year in the United States, while output per man-hour increased only 2 percent

a year. The result was an average rise in U.S. unit labor costs of 4 percent a year. All of the foreign

countries had larger percentage increases in hourly compensation than the United States, but they

also had faster rates of productivity growth.

On a U.S. dollar basis, Canada and Germany had rates of increase in unit labor costs about as

large as the United States because their currencies were revalued during the period. Similarly, the

United Kingdom had a decline in unit labor costs and France a relatively small increase because they

devalued their currencies.

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Chart 1 1 .

Output per Man-Hour, Compensation per Man-Hour, 

and Unit Labor Costs in Manufacturing, 1965-70

(Average Annual Rate of Change)

UNITED STATES

BELGIUM

CANADA

FRANCE

GERMANY

ITA LY

JAPAN

NETHERLANDS

SWEDEN

UNITED KINGDOM

-5

UNIT LABOR COSTS

I I

NATIONAL CURRENCY

U.S. DOLLARS

0

Percent

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Trends in Output 

per Man-Hour, 

Compensation per 

Man-Hour, and 

Unit Labor Costs 

in Manufacturing, 

1970-72

Beginning in 1970, the position of U.S. unit labor costs relative to other industrial countries

improved. This reversal was due to a speedup in output per man-hour in the United States and

sharp increases in hourly compensation in most of the other countries. Though productivity

continued to grow at a faster rate in most of the foreign countries than in the United States,

growth rates in hourly compensation abroad exceeded productivity growth rates by a wider margin

than was the case in the United States.

The relative cost position of the United States was further improved by the general realignment

of the world's major currencies that took place in 1971. After taking these changes in currency values

into account, the average 1970-72 rates of increase in unit labor costs abroad ranged from about 5

percent in Canada to 18 percent in Japan, compared with 0.4 percent in the United States.

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Chart 1 2 .

Output per Man-Hour, Compensation per Man-Hour, 

and Unit Labor Costs in Manufacturing, 1970-72

(Average Annual Rate of Change)

UNIT LABOR COSTS

IOUTPUT PER MAIM-HOUR

ICOMPENSATION PER MAN-HOUR UNITED STATES

BELGIUM

CANADA

FRANCE

GERMANY

ITALY

JAPAN

NETHERLANDS

SWEDEN

UNITED KINGDOM

20 10 15

Percent

20

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Levels of Output 

per Man-Hour, Unit 

Labor Costs, and 

Hourly Labor 

Costs in the 

Iron and Steel 

Industry

International comparisons are preferably based not only on a knowledge of relative trends in

productivity and unit labor costs but also on a knowledge of relative levels. However, the iron and

steel industry is the only major industry for which information on relative levels is regularly

available. Even here the scarcity of information means that the different products of each country's

steel industry must be combined according to their labor requirements in the U.S. industry.

Though hourly labor costs in steel remained substantially higher in the United States than in

the other countries between 1964 and 1972, the gap between them narrowed over the period. Consequently, unit labor costs in three of the four foreign iron and steel industries compared were

within 60 to 90 percent of U.S. levels. In the fourth country, Japan, unit labor costs declined

relative to the United States. The Japanese iron and steel industry was the only one where

productivity levels rose to equal or perhaps surpass those recorded for the U.S. industry.

Unit labor costs should not be regarded as a direct measure of price competitiveness, since

materials, electricity, and capital costs must be taken into account along with relevant transportation

and trade costs. An analysis of trade movements would also require consideration of governmental

actions such as subsidies to increase exports or actions to decrease imports by use of tariffs and

quotas. Finally, indexes which reflect the total range of industry products do not necessarily apply

to each individual product.

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Chart 13 .

Relative Output per Man-Hour, Unit Labor Costs, and Hourly 

Labor Costs in the Iron and Steel Industry, 1964-72

Indexes, United States = 100

OUTPUT

PER MAN-HOUR

U N IT

LABOR COSTS

HOURLY

LABOR COSTS

1964 72 1964 72 1964 12 1964 72

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Compensation in 

Manufacturing 

and Selected 

Industries

The preceding charts show how unit labor costs are directly affected by both productivity

and hourly compensation. Thus, in the absence of productivity data, a comparison of compensation from country to country provides only a partial though still useful insight into relative costs.

In manufacturing as a whole, as well as in three industries in which imports to the United

States are important, compensation was higher in the United States in 1972 than in the other countries

compared. However, the differences among countries varied according to industry; they were substantial in the motor vehicles industry, but less pronounced in the apparel and textile industries.

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Chart 1 4 .

Hourly Compensation of Wage Earners 

in Manufacturing and Selected Industries, 1972

MANUFACTURING

^ / . y . y x v ; v A V ' X v > ^ ‘ - X * X v v . ; . . v . v . v

• X - X v X . v

$

TEXTILES

UNITED STATES

BELGIUM

CANADA

FRANCE

GERMANY

ITA LY

JAPAN

NETHERLANDS

SWEDEN

UNITED KINGDOM

UNITED STATES

BELGIUM

CANADA

FRANCE

GERMANY

ISRAEL

ITA LY

JAPAN

KOREA

NETHERLANDS

UNITED KINGDOM

MOTOR VEHICLES

.1..................J............ ,..J ..................J....................1.

XZI

I

LZZ

pry

APPAREL

0 1 2 3 4 5 6 7

U.S. Dollars

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Federal Reserve Bank of St. Louis
Trends in 

Consumer Prices

Consumer prices are determined by demand and supply pressures and also by autonomous

factors such as taxes, rent controls, and other governmental rulings. Thus, changes in food supplies,

import prices, and general monetary and fiscal policies all affect consumer prices.

Productivity growth can moderate consumer price increases. For example, when productivity

growth keeps pace with hourly labor costs, unit labor costs remain the same.

In most countries, prices of services rose more than commodity prices between I960 and 1972.

This situation resulted in large part from the faster rates of productivity growth in the industrial

and agricultural sectors than in the services sector.

Within commodity groupings, prices rose more for food items than for nonfood items.

Several reasons make it impossible to relate these differentials to the differences between industrial

and agricultural productivity rates. Most consumer food items are processed and final prices include

not only payments to farmers but also manufacturing, trade, and transportation costs. In addition,

some countries like the United States are primarily exporters of agricultural products, while other

countries like Japan are primarily importers.

Comparative rates of increase in consumer prices also reflect differences in expenditure patterns.

In countries where services are particularly important and where their prices are rising rapidly, as in

the United States, the overall rate of consumer prices will be forced up more than in countries where

services account for a smaller proportion of consumer expenditures. In countries where food accounts

for a larger proportion of consumer expenditures and food prices are increasing faster than the

average prices of nonfood items, as in Japan, there will also be greater pressure on the overall rate.

Country

Average annual percent change in consumer prices

1960-72 1960-65 1965-72

All items Services Commodities

Food Nonfood

All items All items

United States 2.9 4.0 2.6 2.1 1.3 4.1

Canada 2.8 3.6 3.0 1.8 1.6 3.8

France 4.3 6.6 4.8 3.0 3.8 4.7

Germany 3.2 5.3 2.6 2.3 3.0 3.4

Italy 4.2 6.1 3.8 2.9 4.9 3.6

Japan 5.8 7.0 6.4 3.6 6.2 5.4

United Kingdom 4.7 1 4.8 1 3.5 5.6

1Not Available

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Chart 1 5 .

Consumer Prices, 1960-72

Indexes, 1960 = 100

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Trends in the GNP 

Implicit Price 

Deflator

The implicit price deflator is the overall price index for a national economy; it is implied when

the gross national product (GNP) is estimated in terms of constant as well as current values. Such

estimation is necessary to separate real growth from apparent growth due to price inflation.

Trends in the GNP implicit price deflator between-1960 and 1972 by and large paralleled

trends in the consumer price index for the countries compared: The deflator rose most in Japan,

least in the United States and Canada. However, consumer prices in Japan rose much more than the

GNP deflator did, because the prices of capital investment goods, which make up a large proportion

of the Japanese deflator, rose only moderately. In Germany, on the other hand, the GNP deflator

rose faster than the consumer price index because of a rapid rise in the price of government consumption expenditures, supplemented by a faster rise in the prices of capital investment goods than of

consumption goods. To a large extent the same disparity occured for the same reasons in France

and Italy.

The GNP deflators for the United States and Canada were much lower than for other countries

during 1960-65. However, sharp increases occurred for the two countries from 1965 to 1972.

The GNP deflator differs from the consumer price index for several reasons. It is more comprehensive in its inclusion of government expenditures, capital investment, and the net foreign balance,

and often covers a wider population base for consumer expenditures. The GNP deflator is also

influenced by shifts in expenditures.

Country

Average annual percent change in GNP implicit price deflator

1960-72 1960-65 1965-72

United States 2.9 1.4 4.0

Canada 3.1 1.8 4.1

France 4.5 4.1 4.8

Germany 4.0 3.6 4.3

Italy 4.8 5.5 4.3

Japan 4.8 5.0 4.7

United Kingdom 4.7 3.4 5.9

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Chart 16 .

Implicit Price Deflator for G N P, 1960-72

Indexes, 1960 = 100

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PAR T ill. 

Implications of 

Productivity Growth 

for Living Standards

Productivity growth means essentially that resources are being used more efficiently to produce

a nation's goods and services-an achievement which is a key factor in obtaining higher levels of

economic well-being and national strength. What a nation produces or obtains through trade allows

it to consume or invest that much more. As productivity goes up, a country can obtain more output

for the same labor input and consequently can offer its citizens more to consume.

This increase in real purchasing power, whether measured for the population as a whole-real

GNP per capita-or for 1 man-hour-real hourly compensation-shows up in the structure of consumer

expenditures. In countries with higher standards of living, consumers need to devote a smaller proportion of their income to essentials such as food and clothing.

Productivity increases may also improve living standards by increasing the leisure time granted

the work force. Thus, two potential benefits of productivity are alternatives: An increase in output

per man-hour means either that a given amount of labor time can produce more output, or that a

given amount of output can be produced with less labor time. Less labor time may be realized

through shorter work weeks, reductions in employment-often by means of longer schooling and

earlier retirement-or increased vacation time. The prospect of reducing labor time through reductions in employment is a matter of concern to workers when unemployment is already high, but

experience has shown that productivity growth often goes hand in hand with increased employment.

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Comparative Levels 

of Real GNP per 

Capita

Probably the most important consequence of productivity growth is the effect it has on real

product per capita. The degree of productivity improvement determines in large part the increase

in the amount of goods produced and thus available for purchase by each member of the population.

Under the influence of high rates of productivity growth, real product per person rose rapidly

relative to the United States in Germany, France, Japan, and Italy between 1950 and 1972. By 1972,

real product per person had reached at least four-fifths of the U.S. level in three countries: Canada,

Germany, and France.

Though productivity growth is the major factor influencing trends in product per capita, it

is not the only one. The proportion of the population in the labor force, the proportion

of the labor force that is employed, and average hours per worker all interact with productivity to

determine product per capita.

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Chart 1 7 .

Real GNP per Capita, 1950-72

Indexes, United States = 100

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Trends in Real 

Hourly Earnings

Although GNP per capita is considered the most relevant measure of real purchasing power, the

growth in real hourly earnings for manufacturing employees - hourly compensation adjusted to take

account of changes in purchasing power - is also of interest. Differences between GNP per capita

and real hourly earnings may reflect changes in factors such as the proportion of workers in the

population, hours of work, the distribution of income between labor and nonlabor services, shifts

of GNP towards or from such items as national defense, and investment expenditures which do not

show up in the consumer market basket used to adjust hourly earnings. The fastest growth in real

hourly earnings in manufacturing between I960 and 1972 took place in the countries where manufacturing productivity grew the fastest.

Country

Average annual percent change in real hourly earnings

1960-72 1960-65 1965-72

United States 1.4 1.6 1.4

Canada 2.8 1.8 3.6

France 4.5 3.3 5.4

Germany 5.4 6.4 4.7

Italy 6.9 6.6 7.2

Japan 7.8 5.3 9.6

United Kingdom 3.3 2.4 4.0

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Chart 1 8 ,

Real Hourly Earnings of Manufacturing Wage 

Earners, 1960-72

I9 6 0 62 64 66 68 70 72

JAPAN

ITALY

GERMANY

FRANCE

UNITED KINGDOM

CANADA

UNITED STATES

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The Structure 

of Consumer 

Expenditures

Levels of productivity combine with other economic and social factors to shape the structure

of consumer expenditures. The proportion of consumer expenditures going to food is often cited as

reflecting the influence of productivity differentials. In the United States, where productivity levels

were the highest, consumers devoted proportionally half as much to food expenditures in 1971 as

they did in Italy, where productivity levels were among the lowest of the countries compared.

Differences in the proportion of expenditures on housing and transportation and communication were

also great, but factors such as personal preferences, geography, and government policy were probably

more important than productivity in causing these differentials.

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Distribution of Consumer Expenditures, 1971

Percent Distribution

UNITED STATES FRANCE GERMANY

ITALY

11970

JAPAN1

HOUSING

TRANSPORTATION AND

COMMUNICATION

UNITED KINGDOM

EDUCATION AND

RECREATION

OTHER EXPENDITURES

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Trends in 

Unemployment

Productivity growth has sometimes been associated with worker displacement, and sometimes

with increases in employment. In countries where productivity information is available for individual

industries, as in the United States, the data show that productivity growth more often than not has

been associated with employment growth.

On the international level, the relationship between productivity growth and unemployment

rates is not clear. However, it is often thought that countries where productivity is rising will have

low unemployment, because productivity growth is generally associated with increases in output

which generally also result in increases in employment.

Chart 20 suggests that there may be some merit to this analysis. The countries where unemployment has been consistently low-Germany, Japan, and France-are countries where productivity

has made rapid advances, as shown in chart 1. The countries where unemployment has been consistently high-the United States and Canada-are countries where productivity has been growing

relatively slowly. Nevertheless, one should be cautious about inferring a direct relationship, as

many other factors are involved. Perhaps such a relationship represents the favorable effect of low

unemployment rates on productivity rates.

Country

Average unemployment rates (percent)

1960-72 1960-64 1965-72

Urtited States 5.0 5.7 4.6

Canada 5.4 6.0 5.0

France 2.2 1.7 2.3

Germany .6 .5 .7

Italy 3.6 3.4 3.8

Japan 1.3 1.4 1.3

United Kingdom 3.5 2.6 3.9

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Chart 20.

Unemployment Rates, 1960-72

Percent

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School Enrollments 

and Education 

Expenditures

The proportion of young people enrolled in school and the proportion of GNP devoted to

education indirectly reflect the rate of productivity growth. A high level of productivity permits

a nation to divert some of its resources from immediate production to purposes such as education.

In turn, the consequent improvement in labor quality will increase productivity levels when the

young people enter the production process.

The countries with the highest levels of productivity.-the United States and Canada-had the

largest proportion of young people enrolled in school at all levels in 1969. These two countries

also devoted the largest share of GNP to public expenditures on education.

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School Enrollments and Education Expenditures, 1969

SCHOOL ENROLLMENTS

(Percent of School-Age Population)

PUBLIC EDUCATION EXPENDITURES

(Percent of GNP)

30 60

Percent

1 Public University Enrollment Only

2 Ministry of Education Expenditures Only

31967

Source: United Nations Educational, Scientific, and

Cultural Organization

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The Contribution 

of Productivity to 

Economic Growth

Economic growth refers to the increase in the output of an economy. This increase can occur

only if inputs such as employment increase or if productivity increases.

Productivity increases made the major contribution to economic growth between 1950 and

1972. Productivity growth accounted for at least half the total growth in all of the countries compared,

and for the entire growth in Italy. These data suggest that, for developed countries, growth rates are

more influenced by productivity changes than by population increases.

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Chart 22.

Contribution of Growth in Output per Employee to 

Growth in Real G N P , 1950-72

Percentage Points

10

UNITED STATES CANADA FRANCE GERMANY ITA LY JAPAN UNITED KINGDOM

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50

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PAR T IV.

Factors Affecting

Productivity

Growth

The factors which influence changes in productivity vary from the short to the long term. Shortterm movements in productivity are directly related to the business cycle as labor inputs tend to lag

behind demand changes.

Improvements in the quality of labor, increased availability of capital, and advances in technology

constitute the basic sources of growth in output per unit of labor input. Other sources include

improvements in the allocation of resources, increased economies of scale, and advances in managerial

know-how. All of these factors are so interrelated that it is difficult to determine the separate effect

of each one. Consequently, the charts that follow show changes in some of the factors that affect

productivity, without attempting to assess the extent of their influence.

In a dynamic economy, the interaction between factors affecting productivity and factors

affected by productivity make it often seem valid to include the same data under either heading. Thus,

expenditures on education and capital investment are both a result of past productivity gains and a

force tending to increase future productivity rates. Likewise, energy consumption per capita is a

measure of past growth and an indicator of technological progress and increased capital investment.

Changes in the type of labor input affect productivity growth. An increase in the educational

attainment of the labor force can spur productivity by improving the quality of the labor input. A

change in the labor supply, such as that represented by the changing labor force participation of women

in many countries, may also influence productivity change. Shifts of employment between sectors of

the economy affect productivity to the extent that productivity levels in the sectors where employment

is expanding differ from those where it is contracting.

Capital investment has made an important contribution to productivity improvement in industrialized countries, in large part because the amount of capital supporting each worker has grown substantially.

Land, or natural resources, tends to be ignored as a factor in the growth of national productivity.

Land, which is essentially constant, can be important in explaining the differences in productivity levels

between countries, especially for agricultural production.

Technological change is the other important source of productivity growth. Some indicators of

technological change include research and development (R&D) programs, diffusion of selected innovations,

patent activities, and energy consumption.

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Population,

Labor Force, 

Employment, and 

Unemployment

The relations between population, labor force, and productivity growth are unclear. Between

I960 and 1972, labor force participation rates (labor force as a percent of working age population)

declined in all major industrial countries except the United States and Canada. In both of these

countries, the increase was entirely due to a significant rise in female labor force participation,

particularly on the part of married women. Male participation rates declined in all the countries

studied. Migration from rural to urban areas in Japan and Italy contributed to a sharp decline in

participation rates, as many women and children who formerly worked as unpaid farm laborers

withdrew from the labor force when their families left agriculture.

Changes in the proportion of the working age population in the labor force and in the proportion of the labor force employed have more of an effect on economic growth-GNP-than on productivity

growth-GNP per employee. If more of the population works, the national product will grow, though

the amount of growth will depend on how efficient the additional workers are.

Country

Working age population1

as percent of

civilian population

Civilian labor force as

percent of working

age population

Percent of civilian

labor force

Employed Unemployed

1960 1972 2 1960 1972 2 1960 1972 1960 1972 2

United States 65.8 69.4 59.4 60.4 94.5 94.4 5.5 5.6

Canada 66.5 72.3 54.2 56.5 93.0 93.7 7.0 6.3

France 69.2 71.7 62.0 58.1 97.8 97.8 2.2 2.2

Germany 78.6 77.5 60.0 57.0 99.2 99.3 .8 .7

Italy 76.4 76.9 54.8 47.4 95.7 96.6 4.3 3.4

Japan 69.9 75.2 67.9 63.7 98.3 98.6 1.7 1.4

United Kingdom 76.6 75.8 60.4 59.9 97.7 93.7 2.3 6.3

^Sixteen and over in the United States and France; 15 and over in Germany, Japan, and the United Kingdom; 14 and over in Canada and Italy.

21970 for France and Italy; 1971 for Germany.

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Work Status of the Civilian Population, 1972

Percent Distribution

1970

'1971

GERMANY2

EMPLOYED

UNEMPLOYED

OF WORKING AGE

BUT NOT IN THE

LABOR FORCE

NOT OF WORKING AGE

UNITED

KINGDOM

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Trends in the 

Industrial Structure 

of Employment

Shifts of employment from one sector to another reflect different rates of change in demand

and productivity. In turn, these shifts affect overall rates of change in productivity and economic

growth.

From 1950 to 1970 the most pronounced shifts out of agriculture took place in Italy and Japan;

in 1950, these two countries were the least developed of the countries compared. During the period

almost all the countries compared had large shifts into services. By 1970, the employment structures

of the six countries resembled each other considerably more than they had in 1950.

Country

Change in share of total employment by sector, 1950-70

(in percentage points)

Agriculture Industry Services

United States - 7.8 - 0.5 8.3

Canada -15.2 - 4.3 19.5

Germany -13.7 6.4 7.3

Italy1 -25.7 13.1 12.0

Japan -26.2 12.1 14.1

United Kingdom - 2.4 - 1.5 4.0

11951-70

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Distribution of Civilian Employment by Economic Sector, 

1950-70

Percent

1950 1970

SERVICES

INDUSTRY

AGRICULTURE

100

50

UNITED STATES

1951 1970

0 L

ITALY

1950 1970

CANADA

1950 1970

JAPAN

1950 1970

. . a

GERMANY

1950 1970

UNITED KINGDOM

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Trends in the Sex 

Composition of 

the Labor Force

Changes in the sex composition of the labor force can affect productivity to the extent that

they promote or retard the more efficient utilization of the labor force. Such changes are almost

always accompanied by changes in the total labor supply, as well as by shifts in age composition.

Women make up a potential source of new labor force entrants, as family and social

responsibilities until recently limited their participation in industrialized economies. Technological

progress has both eased the burdens associated with these responsibilities and diminished the proportion of jobs that require great physical strength.

Women are an extremely important source of labor supply since male participation rates have

been declining in all of the countries studied as a result of longer schooling and earlier retirement.

The higher proportion of females in the labor force in the United States, the United Kingdom, and

Canada in 1971 reflect both higher participation rates for women and lower rates for men compared

with I960. The lower rates reflect movement out of agriculture where women are an important part

of the work force.

Country

Change in proportion of women

in civilian labor force, 1960-71

(in percentage points)

United States 4.8

Canada 7.0

France -1.31

Germany -1.3

Italy -2.4

Japan -1.8

United Kingdom 2.1

10ctober 1960 to March 1967

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Chart 25.

Women as a Percent of the Total Civilian Labor Force, 

1960 and 1971

Percent

U NITED STATES CANADA FRANCE GERMANY ITA LY JAPAN UNITED KINGDOM

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Capital

investment

Since growth in output per man-hour is closely related to the amount of capital stock supporting

each worker, a high ratio of capital investment to output is a precursor of growth in productivity.

However, too much of a correlation should not be expected. Since capital investment refers to

additions to capital stock as well as replacements, comparing rates of capital investment fails to take

into account differences in the capital stock already in use. In addition, the lags that exist between

the decision to invest in new capital stock, its installation, and the realization of productivity gains

tend to obscure the relationship between investment and productivity in country-to-country comparisons. Nevertheless, chart 26 shows a surprising correlation between the rates of growth in productivity

and capital investment in manufacturing over a short period of time.

During the !960's, Japan had the highest rate of investment as well as the highest rate of

productivity gain. Yet the United States, which has the highest level of productivity, also has the

highest level of capital stock per worker, according to the scant data available.

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Chart 26.

Growth in the Output per Man-Hour in Manufacturing 

and Rate of Capital Investment

OUTPUT PER MAN-HOUR, 1960-72

(Average Annual Percent Change)

CAPITAL INVESTMENT

OF OUTPUT, 1960-71

AS PERCENT

AVERAGE

UNITED STATES

BELGIUM

CANADA

FRANCE

GERMANY

ITA LY

JAPAN

NETHERLANDS

SWEDEN

UNITED KINGDOM

12 0 10 20 30

Percent

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Some Sources 

of Agricultural 

Productivity

Three types of data highlight some of the reasons for the U.S. advantage in food output per

person in 1970: agricultural land available per farm person, fertilizer usage per farm person, and

tractors per farm person. None of the geographic areas shown reached even one-fourth of the U.S.

level for any of the three measures.

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Chart 2 7 .

Factors Affecting Agricultural Productivity, 1970

AGRICULTURAL L A N D 1

PER PERSON

IN FARM POPULATION

FERTILIZER USAGE 2

PER PERSON

IN FARM POPULATION

TRACTORS IN USE3

PER PERSON

IN FARM POPULATION

UNITED STATES

WESTERN EUROPE

OTHER

DEVELOPED COUNTRIES

COMMUNIST ASIA

OTHER LESS

DEVELOPED COUNTRIES

WORLD

0 10 20 100

1 LATEST YEAR

21970/71

31971

Indexes, United States = 100

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Trends in the 

Diffusion of Major 

Technological 

Innovations

Productivity growth is directly affected by the rate of acceptance of new technology.

Researchers generally agree that the rate of diffusion of new technology varies considerably within

and between industries and countries, but disagree as to the specific factors causing this variation

and their relative importance. Factors which reportedly affect the diffusion rate include the cost and

profitability of the innovation, the growth of multinational corporations, and the size of the firm.

Productivity improvement that results from technological change is an important element in

international competition. Information available for three major technological innovations of the

post-World War II period shows that the United States led other major industrial countries in both

computer installations and the production of numerically controlled machine tools, but that it

trailed Japan and Germany in the proportion of steel produced in basic oxygen furnaces.

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Chart 28.

Diffusion of Three Innovations

VALUE OF

NUMERICALLY CONTROLLED

MACHINE TOOL PRODUCTION,

1967

PROPORTION OF STEEL

OUTPUT PRODUCED IN

BASIC OXYGEN FURNACES,

1960 AND 1972

ELECTRONIC

DIG ITAL COMPUTERS

IN USE,

1965 AND 1971

UNITED

STATES

CANADA

FRANCE

GERMANY

ITA LY

JAPAN

SWEDEN

UNITED

KINGDOM

NOT A VA ILA B LE

0 20 40 60 280

1ig63 Millions of Dollars

Source: Organisation for Economic

Co-operation and Development

300 0 20 40 60 80

Percent

Source: United Nations

0 10 20 30 80 90

Thousands

Sources: U.S.-EDP Industry Report, March

1972. Other Countries- National Bureau of

Standards, EDP Industry Report, December 1971,

and Japan Information Processing Center

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Research and 

Development: 

Employment and 

Expenditures

Expenditures for research and development (R&D) can generate increases in productivity through

the development and subsequent application of more efficient equipment, processes, and products.

Chart 29 shows that the most advanced economy - the United States - spent the largest proportion

of GNP on R&D in 1971, the most recent year for which data are available, while Italy assigned the

smallest proportion to it (1969). The three countries with the highest rates of spending on R&D were

also countries with large expenditures in the military sector, which accounts for a major portion of

R&D activity.

Another measure of potential growth in productivity is the proportion of scientists and engineers

in the population engaged in R&D. The United States and Japan led in the employment of scientists

and engineers.

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Chart 29.

Research and Development: Employment and 

Expenditures, 1971

SCIENTISTS AND ENGINEERS ENGAGED

IN R&D PER 1 0,0 00 POPULATION

R&D EXPENDITURES AS

PERCENT OF GNP

0 10 20

Percent

UNITED STATES

CANADA

FRANCE

GERMANY

ITA LY

JAPAN

UNITED KINGDOM

30

Percent

Sources: National Science Foundation and Organisation for Economic Development and Co-operation

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Objectives of

Government

Research

and Development

Expenditures

The effect of research and development programs upon productivity is determined in part by the

allocation of governmental expenditures among major objectives. The United States and the United

Kingdom, which had the lowest rates of productivity growth of the countries compared, devoted the

highest proportion of R&D expenditures to national defense. Japan, with the highest rate of productivity growth, spent very little on national defense or space; well over half its total expenditures went

towards the advancement of science.

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Chart 30.

Government Expenditures for R&D by National Objective, 

1969

Percent Distribution

UNITED STATES FRANCE GERMANY

JAPAN

COMMUNITY

SERVICES

ECONOMIC

DEVELOPMENT

NUCLEAR

ADVANCEMENT VZZZA OF SCIENCE

MISCELLANEOUS

Source: Organisation for Economic Co-operation and Development

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Trends in Patent 

Activity

Patent activity in the United States can be regarded as an indicator of technological innovation

throughout the world since foreign concerns tend to file applications here to protect their more important

inventions. The proportions of patents issued to foreign residents rose steadily between 1963 and 1971.

Four countries accounted for more than half of the total. Germany ranked consistently highest among

the four; however, Japan evidenced the greatest rate of increase.

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Chart 3 1.

Percent of U.S. Patents Issued to Foreign Residents, 

1963-71

Percent

TOTAL ISSUED

TO FOREIGN

RESIDENTS

RESIDENTS OF

OTHER FOREIGN

COUNTRIES

GERMANY

JAPAN

UNITED KINGDOM

FRANCE

1963 64 65 66 67 68 69 70 71

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Federal Reserve Bank of St. Louis
Energy

Consumption

The consumption of energy is one consequence of many technological advances which contribute

to productivity growth. Energy consumption per capita would be expected to show a correlation with

either GNP per capita or GNP per civilian employee. On a per capita basis, the United States and

Canada had both the highest consumption of energy and the highest levels of real GNP in 1972.

Energy consumption per capita not only contributes to real GNP per capita but also is

influenced by it, as higher incomes result in higher consumer demands. Variations between countries

in the use of energy are also influenced by differences in the cost of energy, climate, industrial

structure, measures for environmental protection, and consumer tastes.

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Chart 32.

Relationship of Energy Consumption per Capita to Real 

GNP per Capita, 1971

(Indexes, United States = 100) UNITED STATES

Real GNP Per Capita

Sources: Bureau of Labor Statistics and United Nations

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Appendix A . Supporting Tables for Charts

Users of the following tables should recognize that data on international comparisons have substantial limitations. Problems arise from

such diverse sources as variations in concepts, methodology, ability and

willingness of respondents to provide information, and stage of economic

development. In addition, the use of aggregated measures of economic

activity requires reference to some pattern of expenditure or production.

These broad measures vary depending on the particular national patterns

selected.

For almost all tables, adjustments to the original country data by

either international organizations or U.S. statistical agencies improved

the consistency of the series. However, in general the accuracy attained

would not equal that of U.S. data.

Two important problems deserve special attention. The fairly common statistical procedure of converting GNP measures in foreign currencies to U.S. dollars via use of existing exchange rates was rejected

since the bulk of GNP does not enter into foreign trade. Instead, rough

estimates based on three detailed studies and extended by the most

appropriate existing series were prepared and checked against alternative

procedures.

A second major problem centers on governmental activities (and to

a lesser degree other services). Output measures here are weak, which

may influence comparisons where either measurement techniques differ

or the proportion of GNP associated with governmental output differs.

The official statistics on productivity for the United States relate to the

private economy only and the information presented here for total GNP

per person is provided for comparative purposes and does not supersede

the official data.

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Year.....

United

States Canada France Germany Italy Japan

United

Kingdom

1950..... 100.0 100.0 100.0 100.0 100.0 100.0 100.0

1955..... 116.9 120.6 122.6 137.1 127.9 136.7 112.0

1960..... 123.0 131.5 156.3 192.3 166.5 189.6 123.4

1965..... 144.1 150.3 201.5 237.7 222.1 287.8 139.1

1970..... 152.4 165.4 254.1 300.1 299.0 468.9 158.0

1971 ..... 156.2 170.7 266.5 308.7 305.5 495.6 164.2

1972..... 160.4 175.2 278.0 320.4 321.2 541.1 168.9

Table 2. Real GNP Per Employed Civilian, 1950-72

(Indexes, United States = 100)

United

Year..... Canada France Germany Italy Japan Kingdom

1950.... 82 46 38 30 18 56

1955.... 85 48 44 33 21 54

1960.... 88 59 59 41 28 56

1965.... 86 65 62 46 37 54

1970.... 89 77 74 59 57 58

1971 .... 90 78 74 59 58 59

1972.... 90 80 75 60 62 59

Table 3. Output Per Employed Civilian, by Sector, 1950-71

(Average annual percent change)

Sector

United

States Canada France 1 Germany Italy2

United

Kingdom

Total.................... 2.2 2.4 4.9 5.4 5.3 2.2

Agriculture ..... 5.6 5.3 5.7 6.6 6.9 5.3

Industry......... 2.2 3.6 5.6 5.9 5.2 2.5

Services ......... 1.8 0.6 2.9 3.6 3.1 1.5

1 1955-71

2 1951-71

Table 4. Food Production Per Person in the Farm Population, 1970

(Indexes, United States = 100)

Country Index

United States .......................................... 100.0

Western Europe ...................................... 18.8

Other developed countries ...................... 9.3

World, including United States ................ 2.8

Communist Asia ....................................... .9

Other less developed countries................. 1 -6

Table 5. Output Per Man-Hour in Manufacturing, 1960-72

(Indexes, 1960=100)

Year.....

United

States Canada

EEC (5

Countries) Japan Sweden

United

Kingdom

1960..... 100.0 100.0 100.0 100.0 100.0 100.0

1961 ..... 102.5 105.5 104.6 113.1 104.7 100.8

1962..... 108.3 111.1 111.0 118.1 112.5 103.3

1963..... 112.7 115.2 116.3 127.6 118.4 108.9

1964..... 118.0 120.2 124.5 144.6 132.9 116.8

1965..... 122.7 124.5 133.4 150.7 142.8 120.3

1966..... 124.3 127.9 140.6 165.9 152.0 124.6

1967..... 124.2 131.8 148.6 190.5 162.9 130.2

1968..... 130.2 141.4 160.6 214.5 180.0 139.1

1969..... 133.3 149.1 170.3 247.6 192.2 141.0

1970..... 134.2 151.5 177.1 279.0 202.4 141.9

1971 ..... 143.7 160.2 186.2 289.0 207.8 149.7

1972..... 151.3 167.2 199.7 318.1 224.1 158.2

Table 6. Output Per Man-Hour, Output, and Man-Hours in Manufacturing, 1960-72

(Average annual percent change)

Country Output Per Man-Hour Output Man-Hours

United States.......... ................ 3.2 4.8 1.6

Belgium................... ................ 6.5 6.2 -0.3

Canada...................... ................ 4.2 6.1 1.8

France....................... ................ 5.9 6.6 .7

Germany.................. ................ 5.9 5.6 -0.2

Ita ly .......................... ................ 6.2 6.8 .6

Japan ........................ ................ 10.4 12.7 2.1,

Netherlands ............ ................ 7.1 6.5 -0.5

Sweden...................... ................ 7.3 5.9 -1.3

United Kingdom .... ................ 4.0 3.0 -1.0

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Table 7. Relative Levels1 of Output Per Man-Hour in the Iron and Steel Industry,

1964-72

(Indexes, United States = 100)

Y ear...... France Germany Japan

United

Kingdom

1964 ..... 48-51 54-63 43-54 46-50

1965 ..... 48-52 52-61 43-54 47-51

1966 ..... 50-54 52-61 51-63 45-48

1967 ...... 55-59 59-69 63-78 46-50

1968 ...... 59-63 65-76 68-85 48-52

1969 ...... 64-69 71-83 83-103 49-53

1970 ...... 68-72 72-84 97-121 51-55

1971 ...... 65-69 68-80 94-116 47-51

1972 ...... 66-71 72-84 102-126 49-53

1 Range of estimates.

Table 8. Output Per Man-Hour, Output, and Man-Hours in the Iron and Steel

Industry. 1964-72

(Average annual percent change)

Country Output Per Man-Hour Output Man-Hours

United States .......................... 1.2 -0.4 -1.5

France ...................................... 6.2 3.1 -2.9

Germany ............... .................. 6.0 3.6 -2.2

Japan ...................... .................. 14.3 14.5 .2

United Kingdom .................. 2.2 - .9 -3.0

Table 9. Output Per Man-Hour, Compensation Per Man-Hour, and Unit Labor Costs

in Manufacturing, 1960-72

(Average annual percent change)

Unit Labor Costs

Output Per Compensation National U.S.

Country Man-Hour Per Man-Hour Currency Dollars

United States................ ........... 3.2 5.1 1.8 1.8

Belgium......................... ........... 6.5 9.9 3.2 3.7

Canada .......................... ........... 4.2 6.2 1.9 1.9

France........................... ........... 5.9 9.5 3.5 2.7

Germany........................ ........... 5.9 9.3 3.3 4.8

Italy .............................. ........... 6.2 11.2 4.7 4.9

Japan ............................. ........... 10.4 14.1 3.3 4.1

Netherlands ................. ........... 7.1 12.1 4.7 5.4

Sweden ........................ ........... 7.3 10.4 2.9 3.2

United Kingdom........ ........... 4.0 8.0 3.8 2.2

Table 10. Output Per Man-Hour, Compensation Per Man-Hour, and Unit Labor Costs

in Manufacturing, 1960-65

(Average annual percent change)

Unit Labor Costs

Country Output Per Compensation

Man-Hour Per Man-Hour

National

Currency

U.S.

Dollars

United States.......................... 4.3 3.7 -0.7 -0.7

Belgium ....................... ............ 5.1 8.8 3.5 3.5

Canada...................................... 4.4 3.5 -0.8 -2.9

France ...................................... 4.9 9.0 3.8 3.8

Germany....................... ............ 6.4 9.6 3.0 3.7

Italy .............................. ............ 6.8 13.6 6.3 6.2

Japan............................. ............ 8.5 13.2 4.3 4.2

Netherlands............................. 5.2 11.4 5.9 6.7

Sweden.................................... 7.6 10.3 2.6 2.6

United Kingdom................... 4.1 6.4 2.2 2.1

Table 11. Output Per Man-Hour, Compensation Per Man-Hour, and Unit Labor Costs

in Manufacturing, 1965-70

(Average annual percent change)

Unit Labor Costs

Output Compensation National U.S.

Country Per Man-Hour Per Man-Hour Currency Dollars

United States........... ............... 2.0 6.1 4.0 4.0

Belgium..................... ............... 7.7 9.4 1.5 1.4

Canada...................... ............... 4.5 7.6 3.1 3.5

France ...................... ............... 6.5 10.0 3.2 1.0

Germany.................... ............... 5.6 8.3 2.6 4.1

Italy............................ ............... 5.3 9.4 3.9 3.8

Japan ......................... ............... 13.4 15.2 1.6 1.8

Netherlands ............. ............... 8.5 11.9 3.1 3.0

Sweden ..................... ............... 7.5 10.1 2.4 2.3

United Kingdom..... ............... 3.7 7.4 3.6 -0.4

Table 12. Output Per Man-Hour, Compensation Per Man-Hour, and Unit Labor Costs

in Manufacturing, 1970-72

(Average annual percent change)

Unit Labor Costs

Output Per Compensation National U.S.

Country Man-Hour Per Man-Hour Currency Dollars

United States ............ ............. 6.2 6.6 0.4 0.4

Belgium ..................... ............. 7.3 13.5 5.8 12.4

Canada ........................ ............. 5.0 7.7 2.6 5.3

France ......................... ............. 6.0 12.5 6.1 11.1

Germany..................... ............. 6.0 12.9 6.5 13.9

Italy ............................. ............. 5.6 16.1 9.9 13.9

Japan ........................... ............. 6.8 15.9 8.6 18.1

Netherlands................ ............. 6.5 13.5 6.6 13.1

Sweden........................ ............. 5.2 12.7 7.1 11.8

United Kingdom....... ............. 5.6 13.6 7.6 9.9

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Table 13. Relative Output Per Man-Hour, Unit Labor Costs, and Hourly Labor Costs in the Iron and Steel Industry, 1964-72

(Indexes, United States = 100)

Output Per Man-Hour Unit Labor Costs in U.S. Dollars Hourly Labor Costs

Y ear....... France Germany Japan

United

Kingdom France Germany Japan

United

Kingdom France Germany Japan

United

Kingdom

1964 ....... 48-51 54-63 43-54 46-50 66-72 58-72 31-40 57-64 34-35 37-39 17-17 29-30

1 9 6 5 ....... 48-52 52-61 43-54 47-51 69-75 63-78 34-43 61-68 35-36 38-40 18-18 31-32

1 9 6 6 ....... 50-54 52-61 51-63 45-48 67-73 65-80 31-39 67-75 36-37 39-42 20-20 32-33

1967 ....... 55-59 59-69 63-78 46-50 63-68 57-71 27-35 60-67 37-38 39-42 21-22 30-31

1968 ....... 59-63 65-76 68-85 48-52 62-67 53-65 28-35 53-59 39-40 40-42 23-24 27-28

1 9 6 9 ....... 64-69 71-83 83-103 49-53 56-61 50-62 25-32 52-58 38-39 41-44 26-26 28-29

1 9 7 0 ....... 68-72 72-84 97-121 51-55 54-59 64-80 25-31 55-62 39-40 54-48 30-31 30-31

1971 ....... 65-69 68-80 94-116 47-51 60-65 73-90 27-35 60-67 41-42 58-62 32-32 31-32

1 9 7 2 ....... 66-71 72-84 102-126 49-53 65-70 73-91 29-35 62-69 46-46 62-66 37-38 33-34

Table 14. Hourly Compensation of Wage Earners in Manufacturing and Selected Table 15. Consumer Prices, 1960-72

Industries, 1972 (Indexes, 1960= 100)

(U.S. dollars)

Motor United United

Country Manufacturing Vehicles Textiles Apparel Y ear....... States Canada France Germany Italy Japan Kingdom

United States ........... ..... $ 4.75 $ 6.49 $ 3.25 $ 3.12 1960 ....... 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Belgium ..................... 2.89 3.59 2.51 1.90 1961 ....... 101.1 100.9 103.3 102.5 102.1 105.3 103.4

Canada ....................... 4.28 5.68 3.23 2.65 1962 ....... 102.2 102.1 108.3 106.2 106.8 112.4 107.8

France ........................ 2.31 2.75 2.01 1.84 1 9 6 3 ....... 103.5 104.0 113.5 109.2 114.8 120.9 110.0

Germany..................... 3.18 4.03 2.61 2.42 1964 ....... 104.8 105.8 117.4 111.9 121.6 125.5 113.6

Israel............................

- - 1.36 1.03

Italy ........................... 2.54 2.90 2.08 2.01 1 9 6 5 ....... 106.6 108.4 120.3 115.4 127.1 135.1 119.0

Japan ........................... 1.69 1.86 1.11 .92 1 9 6 6 ....... 109.7 112.4 123.5 119.6 130.1 142.0 123.7

Korea........................... - - .23 .19 1967 ....... 112.8 116.5 126.9 121.7 134.9 147.7 126.7

Netherlands ............... 2.93 3.08 2.63 1.59 1968 ....... 117.6 121.2 132.6 123.6 136.7 155.5 132.7

Sweden ..................... 3.98 4.12 - - 1969 ....... 123.9 126.7 141.2 126.9 140.3 163.6 139.9

United Kingdom...... 2.04 2.65 1.69 1.37

1970 ....... 131.2 130.9 148.5 131.6 147.2 176.2 148.8

1971 ....... 136.8 134.7 156.7 138.4 154.3 187.3 162.8

1972 ....... 141.3 141.1 166.4 146.4 163.1 196.5 174.4

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Y ear......

United

States Canada France Germany Italy Japan

United

Kingdom

1960...... 100.0 100.0 100.0 100.0 100.0 100.0 100.0

1961 ...... 101.3 100.5 103.3 104.4 102.7 106.9 103.3

1962...... 102.4 101.9 108.3 108.6 108.6 111.3 106.8

1 9 6 3 ...... 103.8 103.5 114.8 112.0 118.0 116.1 109.1

1 964...... 105.3 106.3 119.4 115.1 125.4 120.8 112.0

1965...... 107.4 109.7 122.3 119.3 130.4 127.4 116.5

1 966...... 110.3 114.5 125.9 123.4 133.2 133.3 121.2

1967 ...... 113.8 118.9 129.5 125.0 137.1 138.9 124.8

1 968...... 118.4 122.8 135.4 127.0 139.1 144.3 128.8

1 9 6 9 ...... 124.1 128.3 144.3 131.5 144.9 150.2 133.7

1 9 7 0 ...... 130.9 134.0 152.2 140.8 154.6 160.2 143.8

1971 ...... 137.1 138.3 160.5 151.5 164.9 167.7 158.5

1972 ...... 141.4 145.0 169.7 160.7 174.6 176.1 173.3

Table 17. Real GNP per Capita,

(Indexes, United States = 100)

Year ....... Canada France

, 1950-72

Germany Italy Japan

United

Kingdom

1950.... ... 77 54 45 31 20 63

1955 .... ... 78 56 59 35 25 64

I9 6 0 .... ... 81 66 75 43 36 69

1965 .... ... 82 70 77 46 47 67

1970....... 86 81 85 54 71 65

1971 .... ... 88 83 84 53 73 65

1972 .... ... 88 82 82 51 75 63

Table 18. Real Hourly Earnings of Manufacturing Wage Earners, 1960-72

(Indexes, 1960= 100)

Y ear......

United

States Canada France Germany Italy Japan

United

Kingdom

1960...... 100.0 100.0 100.0 100.0 100.0 100.0 100.0

1961 ...... 101.6 101.3 104.4 108.0 104.8 105.7 103.5

1962 ........ 103.5 102.8 107.8 116.1 115.4 112.3 103.1

1963...... 105.1 104.7 111.7 121.0 125.5 116.5 105.2

1 964...... 106.8 106.6 114.7 127.5 131.5 124.8 109.9

1 9 6 5 ...... 108.3 109.2 117.4 136.3 137.9 129.5 112.6

1 966...... 109.8 111.8 121.3 141.1 140.9 138.0 116.7

1967 ...... 111.0 115.1 126.3 144.3 143.7 148.9 118.4

1 968...... 113.3 118.9 133.8 147.9 147.3 165.7 121.4

1 969...... 114.0 123.0 141.6 158.8 157.3 187.9 125.9

1 970...... 113.3 128.5 151.7 172.9 184.0 204.3 136.1

1971 ...... 115.1 136.0 160.2 183.7 205.0 222.2 140.6

1972...... 119.3 140.2 170.0 188.0 224.2 246.4 148.2

Table 19. Distribution of Consumer Expenditures, 1971

(Percent)

Item

United

States France Germany Italy Japan^

United

Kingdom

Total Expenditures.....,.100.0 100.0 100.0 100.0 100.0 100.0

Food ............................. . 17.6 26.5 21.9 35.0 30.7 22.3

Clothing, Medical Care

and Personal Care....

.. 19.4 19.8 20.5 18.2 16.8 17.2

Housing.......................... . 27.1 22.2 26.5 19.3 25.6 24.7

Transportation and

Communication....... . 15.4 10.7 11.8 11.0 4.3 12.4

Education and Recreation ............................. . 14.1 13.8 11.9 12.6 12.8 18.7

Other ............................ . 6.4 7.0 7.4 3.9 9.8 4.7

1 1970.

Table 20. Unemployment Rates, 1960-72

(Percent)

United

Y ear....... States Canada France Germany Italy Japan

United

Kingdom

1 9 6 0 ....... 5.5 7.0 2.2 0.8 4.3 1.7 2.3

1961 ....... 6.7 7.1 1.9 .5 3.7 1.5 2.1

1 9 6 2 ....... 5.5 5.9 1.9 .4 3.2 1.3 3.0

1 9 6 3 ....... 5.7 5.5 1.9 .5 2.7 1.3 3.8

1964 ....... 5.2 4.7 1.6 .3 3.0 1.2 2.6

1 9 6 5 ....... 4.5 3.9 1.8 .3 4.0 1.2 2.3

1 9 6 6 ....... 3.8 3.6 1.8 .3 4.3 1.4 2.4

1967 ....... 3.8 4.1 2.3 1.0 3.8 1.3 3.8

1 9 6 8 ....... 3.6 4.8 2.7 1.2 3.8 1.2 3.7

1 9 6 9 ....... 3.5 4.7 2.1 .8 3.7 1.1 3.7

1 9 7 0 ....... 4.9 5.9 2.2 .5 3.4 1.2 4.0

1971 ....... 5.9 6.4 2.7 .7 3.4 1.3 5.3

1972 ....... 5.6 6.3 2.9 .9 4.0 1.4 6.2

Table 21. School Enrollments and Education Expenditures, 1969

Country

Proportion of school-age

population enrolled in school

Primary and Post- Public expenditures on

Secondary secondary education as a percent of GNP

United States.......... ... 86.2 48.0 6.3

Canada ........................ 85.7 24.8 8.3

France ...................... ... 72.8 15.21 4.5 2

Germany....................... 79.5 12.0 3.6

Italy .......................... .. 67.0 15.3 4.3 2

Japan ........................ ... 72.8 16.1 4.0

United Kingdom ....,.. 78.6 10.4 3 5.6 3

1 Public university enrollment only. ' 3 1967.

2 Ministry of Education expenditures only.

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Table 22. Contribution of Growth in Output Per Employee to Growth in Real GIMP,

1950-72

(Average annual percent change)

Growth in Growth in Growth in

real civilian real GNP per

Country GNP employment employed civilian Interact

United States............ 3.7 1.5 2.2 _

Canada ....................... 5.0 2.4 2.6 .

France ........................ 5.2 .4 4.8 _

Germany ................... 6.4 .9 5.4 0.1

Italy ............................ 5.4 -0.1 5.4 0.1

Japan ........................... 9.8 1.7 8.0 0.1

United Kingdom .... 2.7 .3 2.4 “

Table 23. Work Status of the Civilian Population, 1972

(Percent distribution)

Of Working Age Not of

Working Age

Civilian Labor Force

Not in

Employed Unemployed Labor Force

United States ........... 39.6 2.3 27.5 30.6

Canada ....................... 38.3 2.6 31.5 27.7

France 1 ................. 40.7 .9 30.1 28.3

Germany2 ............... 43.9 .3 33.4 22.5

Italy 1 ....................... 35.2 1.2 40.4 23.1

Japan ........................... 47.2 .7 27.3 24.8

United Kingdom ..... 42.2 2.8 30.8 24.2

1 1970.

2 1971.

Table 24. Distribution of Civilian Employment by Economic Sector, 1950 and 1970

(Percent)

1950

Country

Agriculture Industry

United States...... 33.7

Canada .................... 22.9 34.6

Germany.............. ... 22.7 43.1

Italy ................. 44.61 29.9 1

Japan .................... ... 43.1 23.5

United Kingdom ,... 5.3 46.5

1 1951.

1970

Services

Agriculture Industry Services

54.0 4.5 33.2 62.3

42.5 7.7 30.3 62.0

34.2 9.0 49.5 41.5

25.61 19.5 43.0 37.6

33.4 16.9 35.6 47.5

48.2 2.9 45.0 52.2

Country 1960 1971

United States ........ 33.4 38.2

Canada ................. . 25.8 32.8

France ................... 38.2 36.9

Germany .............. ,. 37.5 36.2

Italy ..................... .. 29.6 27.2

Japan ..................... ,. 40.3 38.5

United Kingdom .,,. 34.6 36.7

Table 26. Growth in Output Per Man-Hour in Manufacturing and Rate of Capital

Investment

Output Per Man-Hour Capital Investment as Percent of

in Manufacturing Output 1960-71 Average

Country 1960-72 All industry 1 Manufacturing

(Average annual percent change)

United States.................. 3.2 14.3 2 12.0

Belgium ........................... 6.5 19.7 19.5

Canada ............................ 4.2 21.0 14.7

France ............................ 5.9 21.3 N.A.

Germany .................... 5.8 22.4 3 N.A.

Italy .................................. 6.1 17.9 N.A.

Japan ............................. 10.4 29.6 30.5

Netherlands ................... 7.1 21.4 N.A.

Sweden ........................... 7.3 18.7 16.6

United Kingdom.......... 4.0 16.6 13.5

1 Mining, manufacturing, construction, and public utilities.

2 Excludes construction.

3 Total capital investment, excluding residential dwellings, as percent of total

output.

Table 27. Factors Affecting Agricultural Productivity, 1970

(Indexes, United States = 100)

Item

Agricultural land^

per person in farm

population ...........

Fertilizer usage 2

per person in farm

population ..........

Tractors in use 3

per person in farm

population ...........

1 For latest year.

2 For 1970-71.

3 For 1971.

United

States

Western

Europe

Other

developed

countries

Communist

Asia

Other less

developed

countries World

100.0 7.8 20.4 1.5 4.2 5.1

100.0 22.3 9.6 0.4 0.5 2.2

100.0 22.6 5.9 0.1 0.2 1.6

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Value of Numerically Percent of Steel

Controlled Machine Output Produced

Tool Production, 1967 in Basic Oxygen Electronic Digital

Country (Millions of Dollars) Furnaces Computers in Use

1960 1972 1965 1971

United States ........ .......... $ 284.9 3.4 56.0 23,200 88,000

Canada ................... .......... N.A. N.A. , 750 3,800

France .................... .......... 9.0 .7 45.8 500

996

6,700

Germany ................. .......... 29.5 2.5 64.6 7,800

Italy........................... .......... 12.0 0 39.1 1 500 3,300

Japan ........................ .......... 5.9 11.9 79.4 1,445 9,482

Sweden ................... .......... 1.6 3.9 36.5 N.A.

United Kingdom..... .......... 20.1 0.5 42.6 1,850 7,600

1 1963.

N.A. Not Available.

Table 29. Research and Development: Employment and Expenditures, 1971

Country

Scientists and Engineers

Engaged in R &D per

10,000 Population

R & D Expenditures

as Percent

of GNP

United States 25 2.6

Canada 10 1.2

France 12 1.8

Germany 15 2.0

Italy 1 5 1 .9

Japan 25 1.8

United Kingdom 1 8 2.1

1 1969.

Table 30. Government Expenditures for R&D by National Objective, 1969

(Percent distribution)

United

Objective States

Total ......................................... 100

National defense ................ 49

Space .................................... 24

Community services .......... 12

Economic development ... 7

Nuclear energy ................... 6

Advancement of science .. 2

Miscellaneous .................... —

France Germany Japan

United

Kingdom

100 100 100 100

31 19 2 40

7 6 1 4

3 2 4 4

16 2 23 26

18 17 8 12

24 39 61 13

— 15 — —

Total issued Residents of

to Foreign United Other Foreign

Y ear..... France Germany Japan Kingdom Countries

1963.... ... 18.6 1.9 5.1 0.9 4.0 6.7

1964 .... ... 18.9 2.1 5.1 1.2 3.9 6.6

1965.... ... 19.9 2.2 5.4 1.5 4.1 6.7

1966.... ... 20.1 2.1 5.8 1.6 3.9 6.7

1967 .... ... 21.9 2.4 5.7 2.2 4.3 7.3

1968.... ... 22.5 2.4 5.8 2.5 4.2 7.6

1969 .... ... 25.4 2.7 6.7 3.2 4.7 8.1

1970.... ... 26.9 2.7 6.9 4.1 4.6 8.6

1971 .... ... 28.5 2.8 7.1 5.1 4.4 9.1

Table 32. Energy Consumption Per Capita and Real GNP Per Capita, 1971

(Indexes, United States = 100)

Country

Real GNP

Per Capita

Energy Consumption

Per Capita

United States 100 100.0

Canada 88 82.9

France 83 34.9

Germany 84 46.5

Italy 53 23.9

Japan 73 29.1

United Kingdom 65 49.0

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Appendix B. Sources

Sources of the data for the charts and methods of adjustment

are as follows:

1. Trends in real GNP per employed civilian: BLS estimates

based on national sources. GNP is in constant market prices and is

based on OECD definitions, which differ somewhat from the official

U.S. concepts. The employment figures are partially estimated. In

addition, the employment data for France, Germany, Italy, Japan,

and the United Kingdom have been adjusted for rough comparability

with U.S. concepts. Data on output per employed person for the

United States differ from the indexes regularly published by the

Bureau of Labor Statistics since the latter figures exclude general

government. Data for 1950-70 calculated at 5 year intervals only.

2. Comparative levels of real GNP per employed civilian:

Relative levels of real GNP for the European countries for 1955 were

derived from Gilbert and associates, Comparative National Products

and Price Levels (Paris, Organisation for European Economic Cooperation, 1958). The relative level of Canadian real GNP in 1960

was derived from Dorothy Walters, Canadian Growth Revisited,

1950-1967 (Ottawa, Staff Study No. 28, Economic Council of

Canada, 1970). The relative of Japanese real GNP in 1960 was derived from A Study o f International Comparison o f Levels o f Living

(Tokyo, Institute of People's Living, March 1965) as quoted in

Angus Maddison, Economic Growth in Japan and the U.S.S.R. (New

York, W.W. Norton and Company, Inc., 1969). The base year estimates are at U.S. relative prices; if the base year comparisons were

to be made using relative prices in each of the foreign countries,

it would lower the foreign real GNP estimates relative to the United

States. Real GNP and employment for other years were then estimated based on trend data described in (1) above.

3. Trends in output per employed civilian by sector: BLS estimates based on national statistics. The methods followed were similar but not identical to those used for chart 1. Output refers to

gross domestic product rather than gross national product. Output

trends were measured in constant market prices for the United

States, France, and Germany and at constant factor cost for Canada,

Italy, and the United Kingdom. Output by sector at constant prices

is not available for Japan. The employment figures for Italy have

been adjusted for major conceptual differences. The employment

figures for the other countries have not been similarly adjusted, but

such adjustments would have little effect on the trends.

The agricultural sector includes farming, forestry, hunting, and

fishing. Industry is defined as mining, manufacturing, and construction. Services cover transportation, communication, public utilities,

trade, finance, public administration, private household services, and

miscellaneous services. Employment in government enterprises is classified according to the sector appropriate to the output of the enterprise.

4. Levels of food production per person in the farm population: Based on unpublished data from the Economic Research Service, U.S. Department of Agriculture. Value of food production

based on the previously published benchmark for 1959-61 (in 1959

-61 world prices) extended to 1971 by the Economic Research Service using indexes of food production. Farm Population statistics

from Food and Agricultural Organisation, except for the United

States. Regional groups include the following countries:

Other developed countries—Australia, Canada, New Zealand,

Union of South Africa, U.S.S.R., and Eastern Europe.

Less developed countries (except Communist A sia)-A frica

except Union of South Africa, Asia except Japan and Communist Asia, and all of Latin America.

Communist Asia—China, Mongolia, North Korea, and North

Vietnam.

This listing may differ from UN regional groups established for

other purposes.

5, and 6. Productivity, output, and man-hour trends in manufacturing: BLS estimates based primarily on aggregate manufacturing output statistics from national economic accounts and national

data on employment and man-hours worked by all employees.

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7, and 8. Productivity, output, and man-hours in the iron and

steel industry: Comparative 1964 data for the United States, France,

Germany, and the United Kingdom are from An International Comparison

of Unit Labor Cost in the Iron and Steel Industry, 1964: United States,

France, Germany, United Kingdom, Bulletin 1580 (Bureau of Labor

Statistics, 1968); comparative 1964 data for Japan are preliminary

unpublished estimates. The estimates for 1964 are essentially based on

the U.S. definition of the iron and steel industry. Estimates for later

years were obtained by applying trend indexes for each country-unadjusted for comparability among the countries-to the 1964 relatives.

9, 10, 11, and 12. Trends in output per man-hour, compensation

per man-hour, and unit labor costs in manufacturing, 1960-72: BLS

estimates based primarily on aggregate manufacturing output statistics

from national economic accounts, estimates of the number of man-hours

worked by all employees, and aggregate labor compensation statistics.

Trends in unit labor costs on a U.S. dollar basis were calculated using

the average daily exchange rates published in the Federal Reserve Bulletin, Board of Governors of the Federal Reserve System.

13. Levels of output per man-hour, unit labor costs, and hourly

labor costs in the iron and steel industry: See (7 and 8) above.

14. Compensation in manufacturing and selected industries: BLS

estimates based on published average hourly earnings adjusted for compensation items excluded from earnings. The adjustments were based

primarily on labor cost survey statistics. Total compensation refers to

all payments made by the employer directly to the worker before deductions of any kind, plus employer contributions to legally required insurance programs and to contractual and private plans for the benefit of

employees. The earnings and labor cost data are from national and EEC

statistical publications. Hourly compensation was converted into U.S.

dollars using the average daily exchange rate for 1972.

15. Trends in consumer prices: Consumer price indexes published

in national statistical publications converted to a common base year.

16. Trends in the GNP implicit price deflator: Derived from country national accounts data and converted to a common base year.

17. Comparative levels of real GNP per capita: BLS estimates. For

derivation of real GNP estimates, see (2) above. Population estimates

relate to the resident population.

18. Trends in real hourly earnings: Average hourly earnings of

manufacturing wage workers adjusted for changes in consumer prices as

measured by consumer price indexes. The earnings data are from national

and EEC statistical publications; the consumer price data are from

national statistical publications.

19. The structure of consumer expenditures: National accounts

statistics of private consumption expenditures in current prices. National

accounts data for Germany, Japan, and the United Kingdom were adjusted by BLS in order to obtain statistics for comparable expenditure

categories.

20. Trends in unemployment: BLS estimates of unemployment

rates adjusted to U.S. labor force survey concepts and definitions. No

adjustments were made to the published Canadian data. Adjustments

of national data for most countries were based primarily on the results

of labor force surveys. For Great Britain, adjustments were based on the

results of the 1961 population census and the 1966 "sample census."

21. School enrollment and education expenditures: School enrollment ratios calculated by BLS from enrollment figures published in the

UNESCO Statistical Yearbook and population figures by age published

in the United Nations Demographic Yearbook, The first and second

levels cover primary and secondary education. Third level includes: (1)

universities and equivalent degree-granting institutions; (2) teacher training in nonuniversity institutions (e.g., teacher colleges); and (3) other

post-secondary education in nonuniversity institutions (technical colleges,

etc.). Both full-time and part-time students are included except in the

Canadian data which exclude part-time students. Educational expenditure ratios are from the UNESCO Statistical Yearbook. Public expenditures on education comprise recurring and capital expenditures at all

levels of government. Recurring expenditures cover public expenditures

on: (1) school administration; (2) preschool through third level education; (3) other types of education such as special education, adult education, religious schools, and similar institutions; and (4) scholarships,

student transport, and other types of education-related subsidies, if

applicable.

22. The contribution of productivity to economic growth: See (1)

above.

23. Population, labor force, employment, and unemployment: BLS

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estimates of data adjusted to U.S. labor force survey concepts and definitions. See (20) above.

24. Trends in the industrial structure of employment: BLS estimates

of sectoral employment adjusted to U.S. labor force survey definitions

wherever major conceptual differences exist. Other adjustments were also

made by BLS to achieve consistency in the employment series.

Total civilian employment includes wage and salary workers, unpaid

family workers, and the self-employed. Data for the United Kingdom

exclude a small number of unpaid family workers.

For definition of sectors, see (3) above.

25. Trends in the sex composition of the labor force: BLS estimates

adjusted to U.S. labor force survey definitions. See (20) above.

26. Capital investment: The capital investment ratios are BLS estimates derived from published national accounts data. Output is at factor

cost while investment is in purchasers' values. The ratios are based on data

at current prices as figures in constant prices are not available for several

of the countries. U.S. ratios based on constant and current prices are not

significantly different over the time period covered. Ratios for all industry

include public utilities for this chart only. U.S. total excludes construction.

27. Some sources of agricultural productivity: Compiled by the

Economic Research Service, U.S. Department of Agriculture, from F.A.O.

sources, except for U.S. population. For regional listing, see (4) above.

28. Trends in the diffusion of major technological innovations: See

sources listed on chart.

29. Research and development: employment and expenditures:

1969 data from Organisation for Economic Co-operation and Development. 1971 estimates from National Science Foundation developed to

be consistent with earlier OECD data. Employment of scientists and

engineers are full-time equivalents.

30. Objectives of government R&D expenditures: Organisation

for Economic Co-operation and Development.

31. Trends in patent activity: Unpublished data from the U.S.

Patent Office, U.S. Department of Commerce. Comparable charts have

been published previously from the Patent Office data.

32. Energy consumption: Statistical Office of the United Nations.

For real GNP per capita, see (2) and (17) above.

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