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Questions tagged [productivity]

A measure of efficiency in production for some given set of inputs

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Is the Accursed Share hypothesis respected among academics or practitioners?

Batallie, a French philosopher of all things, put forward a famous (at the time) theory known as The Accursed Share. A few lines from the treatise, characterizing his position: I will simply state, ...
1 vote
0 answers
25 views

Data on average annual hours worked by persons engaged

In Penn World Table 10.0 (source: https://www.rug.nl/ggdc/productivity/pwt/pwt-releases/pwt100), the avh (average annual hours worked by persons engaged) figures are missing for many countries. Where ...
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Question on productivity cycles

What is “productivity cycles”? Is this different from business cycles? And suggest papers on the productivity cycles as both theoretical and empirical studies? I will be happy if you inform me ...
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36 views

Modelling the optimal mix of labour

I am trying to model the profit maximization decision of a firm that uses two types of labor, workers A and workers B. I started by drawing the marginal product and marginal cost curves (lines, for ...
3 votes
2 answers
114 views

How to improve the underperforming construction productivity by correcting its market failures?

Globally, labor-productivity growth in construction has averaged only 1 percent a year over the past two decades, compared with growth of 2.8 percent for the total world economy and 3.6 percent in the ...
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1 answer
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How do labor literature measure productivity of the worker?

When a firm hires a worker, they have incomplete information on the workers' productivity. Firm's goal is to hire the most productive workers, and they estimate productivity of the workers given the ...
2 votes
1 answer
87 views

Why in Italy and Spain, as productivity grows, wages don't grow too?

As you can see in this report: https://rpubs.com/lovepeacejoy404/crescita_salariale between labor productivity and the average wage there is a correlation of 76% (Pearson index), while with the ...
1 vote
0 answers
73 views

Testing Kaldor's Second Law

According to Kaldor's second law, as manufacturing industry grows, the productivity in manufacturing will increase: $$p_i=f(g_m)$$ And, from the article of Heather Wells and A.P. Thirlwall (Testing ...
1 vote
1 answer
88 views

The relation between productivity and prices

I apologize if this is a stupid question, I am new/ an amateur in this field. I am wondering, in what way productivity and wages are actually related. If all labor was physical and I invented a pill ...
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1 answer
172 views

Total Factor Productivity and Leontief Production Function

Just a bit of a conceptual question regarding the Leontief production function and the concept of total factor productivity (TFP). In particular, I wondered if these two concepts are at odds? The ...
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Labor Productivity movers and determinants: regression form

Consider a sample of firms' labor productivity over time. Some firms improve their productivity rating (i.e., jump from the lower to the higher productivity quartiles), some don't, and some stay ...
21 votes
2 answers
5k views

Does diversity lead to more productivity?

Is it true that "Companies with diverse workforces outperform those with homogenous teams"? That's what TrendsWatching says anyway. And is it "diverse workforce" or "workforce ...
1 vote
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Total factor productivity (TFP) estimation in R via estprod package

good morning I am trying to calculate the total factor productivity (TFP) for companies in the manufacturing industry through the Levinsohn-Petrin model. To do so, I use the prodest package in R. ...
5 votes
2 answers
160 views

Error while estimating a production function with prodest package in R

I have an unbalanced panel with 15063 firms between 2012 and 2018. I am using this code to estimate the production function with Levinsohn & Petrin method: ...
8 votes
3 answers
5k views

Why is Land not considered as a fixed capital?

As far as I know 'Fixed Capital' includes things which don't deteriorate or get used up upto a long, e.g. tools, machinery and building etc. My question is that since Land fulfills this criteria, why ...
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731 views

Stochastic Frontier Analysis (SFA) in Stata: Technical Efficiency Estimates

I am prepared to look quite the fool, but hopefully you can help me. I am trying to perform Stochastic Frontier Analysis on a balanced panel dataset by estimating the following model: I think the ...
8 votes
1 answer
884 views

What are the causes for the recent dramatic decline in productivity in the US

The recent Q2 release by the BLS on "Productivity and Costs", shows a big drop in productivity (the biggest ever since 1948): more work-hours but less output. Nonfarm business sector labor ...
1 vote
1 answer
159 views

etymology of TFP (total factor productivity)

In economics, total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output (e.g., GDP) to aggregate inputs.1 Under some simplifications ...
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6 answers
13k views

Productivity vs real earnings in the US -- what happened ca 1974?

Somewhat related to the most recent US elections, I've been researching the whole "white working class" situation, and one strange anomaly has popped up. When one looks at a graph of productivity (...
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1 answer
41 views

Calculation of labor, capital and productivity deviation

In Ohanian (2010): The Economic Crisis from a Neoclassical Perspective ( https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.4.45 ) I read about labor, capital and productivity deviation. I would like ...
1 vote
2 answers
2k views

What is establishment-level data

National level or aggregate level data and firm-level data are self explanatory. I have seen certain papers on productivity analysis as well as other topics which refer to "establishment-level" data. ...
3 votes
1 answer
329 views

Steady-state savings rate

I'm having trouble with the steady-state savings rate type of problems. Here is the problem I'm stuck on: The production is $Y = 0.5*K^{1/3}(AN)^{2/3}$. If savings is $s$%, what are the steady-state ...
3 votes
1 answer
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Intuition behind value added as TFP measure

In some papers the authors use value-added over capital and labor as TFP measure, what is the intuition behind this? For example, in one paper I just read the authors use $ \frac{VA}{(p_{K}K + p_{L}L)}...
1 vote
1 answer
60 views

Why are prices deflated in a productivity estimation?

When measuring TFP with the Olley-Pakes method for example, why is it the case that the input and output prices are deflated by an industry price index? What's the intuition behind this? Say we use ...
1 vote
0 answers
17 views

Is there any good summary, lecture notes, textbook or videos that give overview of firm-level productivity models?

As the title says, I am looking for some tutorials/educational materials for firm-level productivity models. I am looking for some source that would cover the most commonly used models. Also, it is a ...
1 vote
1 answer
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The CORE team's writings about labour productivity, real wages, markup and the price-setting curve

I've been reading the free online economics handbook that's developed as part of the CORE-project (here). The book is a refreshing read, but I'm struggling to follow their discussion of the price ...
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1 answer
51 views

Relationship between capital and decreasing marginal prodcutivity

In Capital by Thomas Piketty ( chapter The capital - labor spit in the twenty first century - page 271) we have below quote The evolution of the rate of return on capita, r, significantly reduces the ...
2 votes
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428 views

Arellano and Bond (1991) or Blundell and Bond (1998) in R estimation

I have the following problem with the Arellano and Bond (1991) or Blundell and Bond (1998) estimators in R using the plm package. I receive the following problem when trying to run the needed ...
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1 answer
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can Unit Labour Cost > 100%?

I struggle to interpret this ECB chart: click here for the chart Several countries show consistently $Unit Labour Cost \gg 100%$. For example, Lithuania. Cost of labour $\gg$ Total Output, doesn't ...
1 vote
2 answers
128 views

Basic New Keynesian model with flexible price

I would like to know what would be the response of variables in the Basic New Keynesian model but with flexible prices (ie not with Calvo pricing). For example I have troubles to see how having ...
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111 views

Relationship between productivity and GDP

I was looking at the OECD data for GDP per hour worked as a stand in for productivity and was extremely confused when I started comparing the numbers and tried to understand the relationship between ...
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1 answer
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Literature recommendation

Classic economic theory suggests people earn wages according to their productivity. Over time CEO's, directors, managers and the like seem to earn more relative to the 'normal worker'. Lets call this ...
11 votes
3 answers
401 views

How does GNU software development sustain economically?

I apologise if this question is out of topic, but it is simultaneously an economy and a programming question. If it should go to another SE communality, please indicate me. In theory, GNU software is ...
115 votes
16 answers
21k views

How will non-rich citizens make a living if jobs keep getting replaced by robots and are outsourced?

Decades ago a factory job could support a wife and kids until retirement and they offered insurance, benefits, etc. Now, no more unions, those jobs as well as tech and customer service jobs are ...
-1 votes
2 answers
90 views

Competitive wages under imperfect information

Do competitive wages always have to be defined by marginal productivity? Can we have competitive wages which are not based on productivity, when the information is not perfect? To put it in context, ...
1 vote
1 answer
39 views

Measurement for the downstream use of a commodity

I am looking to find a measurement that would tell me the size of the market of the downstream use of some particular commodity. For example, salt or wheat would be used by many companies downstream. ...
2 votes
1 answer
79 views

Human Capital Vs TFP

I'm interested in familiarizing myself with some of the intra-debates that have occurred over the years, having to do with Mankiw, Romer, Weil (1992) and Klenow, Rodriguez-Clare (1997). Some argue ...
3 votes
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288 views

Arellano and Bond (1991) GMM estimation in R by using plm package

I am a last-year student at university, currently working on my Bachelor's (so still learning R), and I really hope that you would suggest a potential solution (even if to use Python). So, the main ...
-1 votes
1 answer
49 views

Productivity issue

Could someone help with the following? Company produces products of daily demand. It employs workers In number of 12 people (HER) Wages of workers. The costs of hiring and firing are 25 per employee, ...
1 vote
0 answers
39 views

Data on labour productivity in India

I am trying to find historical data at the district, or ideally at the city-level on labour productivity (by sector, with a special focus on agriculture) or perhaps data on a similar measure?
1 vote
0 answers
81 views

How can I add a multidimensional panel to estimate TFP (year, id, region) in R?

I'm not sure about adding fixed effects for the variables year,id,region (using the estprod library) as in this paper using LP stimator. In the STATA forum ( #18 #...
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1 answer
184 views

Unbalanced panel data in prodest package in R

I have a question regarding the usage of unbalanced panel data for TFP estimation by using the prodest package. The dataset could be found here: https://drive.google.com/file/d/...
8 votes
3 answers
2k views

All else being equal, What is the value of job creation?

Job creation value Just to clarify, I have no experience, academic background or deep understanding of economics. Apologies for such a basic question but I couldn't find a real answer. I hear a lot ...
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Is this a correct way of calculating productivity? And can the proposed data be (accurately) used for doing so?

I want to know if my thinking for calculating productivity [2019-USD/hour-worked] is correct. Basics: Take the GDP of a country and divide by the total amount of hours worked in that country -> ...
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178 views

Prodest package in R for TFP estimation, gives different results

I have the following issue: each time I run the estimation of the TFP by using prodest package in R 4.0.3, I obtain different coefficients before the variables as well as omega variable is different: ...
2 votes
2 answers
130 views

Are prices part of total factor productivity?

I am trying to understand how production is related to income/profit and where do prices enter. Suppose there is a single firm with a Cobb-Douglas production technology: $$Y=AK^{\alpha}L^{\beta}$$ ...
1 vote
1 answer
270 views

TFP in R via estprod package

I want to calculate the TFP by using the estprod function (I use R 4.0.2). As far as I understood the only way to calculate the TFP is manual following this logic . ...
3 votes
1 answer
559 views

TFP estimation in R by using prodest and estprod packages

I am writing my Bachelor Thesis and I really need help with the TFP estimation. so far I have a dataset with log values of Value added (va), Labour (l), Capital (k), and Materials (m). The initial ...
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Which diagnostic tests are suitable for Measuring Total Factor Productivity (TFP)?

I did the TFP estimation with Levinsohn Petrin (in R) but I have doubts about the diagnostic tests e.g. I know that the estimation of autocorrelation in residuals has to be done (it would be very ...
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1 answer
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Can demand side restrictions explain the productivity paradox (Solow paradox)?

Productivity paradox https://en.wikipedia.org/wiki/Productivity_paradox is the name for the slow productivity growth (i.e. slow GDP growth) of the developed economies despite the robotics, AI, ...