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Measuring labor cost for productivity comparison

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  • Peter Chinloy

Abstract

This paper presents measures of labor cost applicable when the wage and marginal product are not equal by period. The user cost of labor, an alternative to the wage, is the price of hiring the services of the worker per unit time. This user cost is dependent on the sequence of wages earned by a worker over a career, interest rates, and career length or eventual tenure. For the United States, 1963–1978, labor compensation shares based on the wage exceed those for the user cost. After 1978, the reverse obtains. The contribution of labor, and measured productivity performance is sensitive to the price of labor services. Copyright Kluwer Academic Publishers 1989

Suggested Citation

  • Peter Chinloy, 1989. "Measuring labor cost for productivity comparison," Journal of Productivity Analysis, Springer, vol. 1(1), pages 5-19, March.
    • Handle: RePEc:kap:jproda:v:1:y:1989:i:1:p:5-19
    DOI: 10.1007/BF00161736
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    References listed on IDEAS

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    1. Hall, Robert E, 1982. "The Importance of Lifetime Jobs in the U.S. Economy," American Economic Review, American Economic Association, vol. 72(4), pages 716-724, September.
    2. Hashimoto, Masanori & Raisian, John, 1985. "Employment Tenure and Earnings Profiles in Japan and the United States," American Economic Review, American Economic Association, vol. 75(4), pages 721-735, September.
    3. Gordon, Robert J, 1982. "Why U.S. Wage and Employment Behaviour Differs from That in Britain and Japan," Economic Journal, Royal Economic Society, vol. 92(365), pages 13-44, March.
    4. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70(6), pages 538-538.
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