IDEAS home Printed from https://ideas.repec.org/a/sls/ipmsls/v6y20032.html
   My bibliography  Save this article

Why are Americans More Productive than Canadians?

Author

Listed:
  • Andrew Sharpe

Abstract

Historically, per capita income in the United States has exceeded those in Canada and this difference has reflected higher labour productivity levels south of the 49th parallel. In this article, Andrew Sharpe of the Centre for the Study of Living Standards provides estimates of the size of the gap in aggregate labour productivity between the United States and Canada and discuss possible explanation of the gap. He points out that based on average weekly hours estimates from the U.S. household survey, total economy output per hour in Canada in 2002 was 89 per cent of the U.S. level, compared to 81 per cent using estimates from the establishment survey. Sharpe concludes that the Canada-U.S. aggregate labour productivity gap reflects Canada's lower capital intensity of production, an innovation gap manifested by lower R&D expenditure, a smaller and less dynamic high tech sector, less developed human capital at the top end of the labour market, and more limited economies of scale and scope.

Suggested Citation

  • Andrew Sharpe, 2003. "Why are Americans More Productive than Canadians?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 6, pages 19-37, Spring.
    • Handle: RePEc:sls:ipmsls:v:6:y:2003:2
    as

    Download full text from publisher

    File URL: http://www.csls.ca/ipm/6/sharpe-e.pdf
    Download Restriction: no
    File URL: http://www.csls.ca/ipm/6/sharpe-f.pdf
    File Function: version en francais, pp:29-45
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John R Baldwin & Ron S Jarmin & Jianmin Tang, 2002. "The Trend to Smaller Producers in Manufacturing in Canada and the U.S," Working Papers 02-06, Center for Economic Studies, U.S. Census Bureau.
    2. Someshwar Rao & Ashfaq Ahmad & William Horsman & Phaedra Kaptein-Russell, 2001. "The Importance of Innovation for Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 2, pages 11-18, Spring.
    3. Baldwin, John R. Jarmin , Ron S. Tang, Jianmin, 2002. "The Trend to Smaller Producers in Manufacturing: A Canada/U.S. Comparison," Economic Analysis (EA) Research Paper Series 2002003e, Statistics Canada, Analytical Studies Branch.
    4. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    5. Robert E. Hall & Charles I. Jones, "undated". "The Productivity of Nations," Working Papers 96012, Stanford University, Department of Economics.
    6. Martin Neil Baily & Robert M. Solow, 2001. "International Productivity Comparisons Built from the Firm Level," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 151-172, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. James (Jim) C. MacGee & Joel Rodrigue, 2024. "The Distributional Origins of the Canada-US GDP and Labour Productivity Gaps," Staff Working Papers 24-49, Bank of Canada.
    2. Centre for the Study of Living Standards, 2005. "What Explains the Canada-US ICT Investment Intensity Gap?," CSLS Research Reports 2005-06, Centre for the Study of Living Standards.
    3. Pierre Kohler & Servaas Storm, 2016. "CETA without Blinders: How Cutting “Trade Costs and More” Will Cause Unemployment, Inequality, and Welfare Losses," International Journal of Political Economy, Taylor & Francis Journals, vol. 45(4), pages 257-293, October.
    4. Jean-Francois Arsenault & Andrew Sharpe, 2008. "An Analysis of the Causes of Weak Labour Productivity Growth in Canada since 2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 16, pages 14-39, Spring.
    5. Someshwar Rao & Jianmin Tang & Weimin Wang, 2003. "Canada's Recent Productivity Record and Capital Accumulation," International Productivity Monitor, Centre for the Study of Living Standards, vol. 7, pages 24-38, Fall.
    6. Baldwin, John R. Maynard, Jean-Pierre Tanguay, Marc Wong, Fanny Yan, Beiling, 2005. "Comparaison des niveaux de productivité au Canada et aux États-Unis : étude de certains aspects de la mesure," Série de documents de recherche sur l'analyse économique (AE) 2005028f, Statistics Canada, Direction des études analytiques.
    7. Wulong Gu & Michael Willox, 2018. "Productivity Growth in Canada and the United States: Recent Industry Trends and Potential Explanations," International Productivity Monitor, Centre for the Study of Living Standards, vol. 35, pages 73-94, Fall.
    8. Jeremy Smith, 2004. "Assessing Aggregate Labour Productivity Trends in Canada and the United States: Total Economy versus Business Sector Perspectives," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 47-58, Spring.
    9. Heisz, Andrew & Larochelle-Cote, Sebastien, 2007. "Understanding Regional Differences in Work Hours," Analytical Studies Branch Research Paper Series 2007293e, Statistics Canada, Analytical Studies Branch.
    10. Jeremy Smith, 2004. "Aggregate Labour Productivity Growth in Canada and the United States: Definitions, Trends and Measurement Issues," CSLS Research Reports 2004-04, Centre for the Study of Living Standards.
    11. Lin Shao & Rongsheng Tang, 2021. "Allocative Efficiency and Aggregate Productivity Growth in Canada and the United States," Staff Working Papers 21-1, Bank of Canada.
    12. Andrew Sharpe, 2004. "Ten Productivity Puzzles Facing Researchers," International Productivity Monitor, Centre for the Study of Living Standards, vol. 9, pages 15-24, Fall.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrew Sharpe, 2003. "Why are Americans More Productive than Canadians?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 6, pages 19-37, Spring.
    2. Baldwin, John R. Gu, Wulong, 2008. "Outsourcing and Offshoring in Canada," Economic Analysis (EA) Research Paper Series 2008055e, Statistics Canada, Analytical Studies Branch.
    3. Mark Doms & Ron Jarmin & Shawn Klimek, 2004. "Information technology investment and firm performance in US retail trade," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(7), pages 595-613.
    4. Stephen J. Redding, 2013. "Economic Geography: A Review of the Theoretical and Empirical Literature," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 16, pages 497-531, Palgrave Macmillan.
    5. Fallahi, Firouz & Sakineh, Sojoodi & Mehin Aslaninia, Nasim, 2010. "Determinants of Labor Productivity in Iran’s Manufacturing Firms: With Emphasis on Labor Education and Training," MPRA Paper 27447, University Library of Munich, Germany.
    6. Jennifer Abel-Koch, 2013. "Who Uses Intermediaries in International Trade? Evidence from Firm-level Survey Data," The World Economy, Wiley Blackwell, vol. 36(8), pages 1041-1064, August.
    7. Clymo, AJ, 2017. "Heterogeneous Firms, Wages, and the Effects of Financial Crises," Economics Discussion Papers 20572, University of Essex, Department of Economics.
    8. Chandan Sharma, 2018. "Productivity and Size of Firms: Evidence from Indian Manufacturing," Economics Bulletin, AccessEcon, vol. 38(2), pages 791-798.
    9. Stephen J. Redding & Daniel M. Sturm, 2008. "The Costs of Remoteness: Evidence from German Division and Reunification," American Economic Review, American Economic Association, vol. 98(5), pages 1766-1797, December.
    10. Centre for the Study of Living Standards, 2003. "Productivity Trends in Natural Resources Industries in Canada," CSLS Research Reports 2003-01, Centre for the Study of Living Standards.
    11. Jeffrey I. Bernstein & Richard G. Harris & Andrew Sharpe, 2002. "The Widening Canada-US Productivity Gap in Manufaturing," International Productivity Monitor, Centre for the Study of Living Standards, vol. 5, pages 3-22, Fall.
    12. Shawn D Klimek & Ron S Jarmin & Mark E Doms, 2002. "IT Investment and Firm Performance in U.S. Retail Trade," Working Papers 02-14, Center for Economic Studies, U.S. Census Bureau.
    13. Tuan Anh Luong, 2012. "The between firm effect with multiproduct firms," Globalization Institute Working Papers 122, Federal Reserve Bank of Dallas.
    14. Baldwin, John R. Caves, Richard Gu, Wulong, 2005. "Réactions à la libéralisation des échanges : changements observés au niveau de la diversification des produits dans les usines sous contrôle étranger et canadien," Série de documents de recherche sur l'analyse économique (AE) 2005031f, Statistics Canada, Direction des études analytiques.
    15. John R. Baldwin & Richard E. Caves & Wulong Gu, 2005. "Responses to Trade Liberalization: Changes in Product Diversification in Foreign- and Domestic-Controlled Plants," Chapters, in: Lorraine Eden & Wendy Dobson (ed.), Governance, Multinationals and Growth, chapter 10, Edward Elgar Publishing.
    16. John Baldwin & W. Brown, 2004. "Regional manufacturing employment volatility in Canada: The effects of specialisation and trade," Economics of Governance, Springer, vol. 83(3), pages 519-541, July.
    17. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2014. "Product Complexity, Quality of Institutions and the Protrade Effect of Immigrants," The World Economy, Wiley Blackwell, vol. 37(1), pages 63-85, January.
    18. Oh, Chang Hoon & Travis Selmier, W. & Lien, Donald, 2011. "International trade, foreign direct investment, and transaction costs in languages," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 732-735.
    19. Edmond Noubissi & Boker Poumie & Hilaire Nkengfack, 2021. "Effect of environmental policies on exports from sub‐Saharan African countries," African Development Review, African Development Bank, vol. 33(4), pages 688-702, December.
    20. Beestermöller, Matthias, 2017. "Striking Evidence? Demand Persistence for Inter-City Buses from German Railway Strikes," Discussion Papers in Economics 31768, University of Munich, Department of Economics.

    More about this item

    Keywords

    Productivity; Canada; United States; Employment; Hours; Hours of Work; Capital; International Comparisons; Purchasing Power Parity; Labour Productivity Gap; Level Gap; Alternative Data Sources;
    All these keywords.

    JEL classification:

    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sls:ipmsls:v:6:y:2003:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CSLS (email available below). General contact details of provider: https://edirc.repec.org/data/cslssca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.