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Monash University – ACER CENTRE FOR THE ECONOMICS OF EDUCATION AND TRAINING

Monash University – ACER CENTRE FOR THE ECONOMICS OF EDUCATION AND TRAINING. Industry-level measures of productivity growth Michael Long 14 th National Conference 29 October 2010 Ascot House, Melbourne. Some topics Productivity measures Australia’s productivity growth

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Monash University – ACER CENTRE FOR THE ECONOMICS OF EDUCATION AND TRAINING

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  1. Monash University – ACER CENTRE FOR THE ECONOMICS OF EDUCATION AND TRAINING Industry-level measures ofproductivity growth Michael Long 14th National Conference 29 October 2010 Ascot House, Melbourne

  2. Some topics • Productivity measures • Australia’s productivity growth • Education and training • Service industries • Productivity growth by industry • Value-added dollar per hour by industry • Builds on a project for Service Skills Australia

  3. Productivity • Central to our standard of living • More output for fixed inputs • Many influences: • Quality of labour • Technology • Workforce strategies • Capacity utilisation • Economies of scale • Natural disasters • Government regulation • Changed inputs

  4. Productivity measures • Labour productivity • LP = VA / L or LP = (GO - I) / L • Capital productivity • KP = VA / K or KP = (GO-I) / K • Multifactor productivity (value added) • MFPVA = VA / (KL) or MFPVA = (GO-I) / (KL) • Multifactor productivity (gross output) • MFPGO = GO / (IKL)

  5. Sources • National accounts • Quarterly business indicators survey • Labour force survey • Price indices • Industry measures • Ad hoc surveys eg of hotel occupancy

  6. Caveats • Quality • Intra-industry transfers • The business cycle • All the problems associated with GDP

  7. Australia’s productivity growth Labour, Capital and Multifactor Productivity Indexes: Five year moving averages, 1985-90 . Adapted from ABS, Experimental estimates of industry multifactor productivity, Australia: detailed productivity estimates. 1985-86 to 2008-09. 5260.0.55.002

  8. Australia’s productivity growth

  9. Australia’s productivity growth Average labour productivity growth by selected OECD countries, 2004 to 2008 OECD.Stat 24 May 2010.

  10. Service industries • Service industries are sometimes considered the poor cousins in terms of productivity but they are not all created equal • Market and non-market • Estimates available/not available • Mozart’s string quintet in G Minor • Travel, health, venues, media, digital recordings.

  11. Productivity and education & training • Observation of association between education levels and earnings & labour force participation • More detailed statistical analyses linking education to labour market outcomes • Estimates of the more than satisfactory rates of return to investment in education • Growth accounting – over-time within and between countries • Self-sustaining growth theory

  12. Productivity and education & training

  13. Labour productivity by industry Annual change in labour productivity by industry, Australia 1998-99 to 2008-09 Adapted from ABS, Experimental estimates of industry multifactor productivity, Australia: detailed productivity estimates. 1985-86 to 2008-09. 5260.0.55.002

  14. MFPVA productivity by industry Annual change in MFPVA productivity by industry, Australia 1998-99 to 2008-09 Adapted from ABS, Experimental estimates of industry multifactor productivity, Australia: detailed productivity estimates. 1985-86 to 2008-09. 5260.0.55.002

  15. $ value-added per hour by industry Dollars of value-added output per hour of labour by industry, Australia 2007 www.euklems.net.

  16. Thank you • and also www.education.monash.edu.au/centres/ceet

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