But the greatest part of the increase in output comes from the fact that we use labor more productively, more efficiently, than at midcentury. In other words, economic growth, by which we mean growth in per capita output, has been driven primarily by labor productivity growth. This is likely to be true in the future as well. The less than optimistic view about growth, then, is a view that labor productivity growth will be slow. A simple equation, in words, can help us understand the determinants of growth in per capita output.
Labor intensity is a measure of how hard a population is working.
It is determined by three factors. The first is the labor force participation rate , which is the percentage of people of working age who are in the labor force. The second is the employment rate , the percent of all participants in the labor force who are employed. The third is average hours worked , or the number of hours the average employed person works in a week. In spite of the fact that a higher proportion of women work out of the home, the overall labor participation rate rose only at an annual rate of 0.4 percent for the period since 1964.