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The composition of labour input: Sensitivity testing and results for productivity analysis

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  • Ashley Ward
  • Belen Zinni

Abstract

Composition Adjusted-Labour Input (CALI) measures account for workers’ differences in skills and productive capacity. This study reviews the most relevant literature to have produced CALI estimates to date and presents a generic approach to produce CALI measures for 21 countries. It finds that education and age (proxy for work experience) are two key workers’ characteristics to be included in CALI measures, with additional workers characteristics having a more limited impact. Replacing a traditional measure of labour input, such as hours worked, with a measure of CALI in the growth accounts leads to a significant downward revision in multifactor productivity (MFP) growth in countries that experience large changes in the composition of labour.

Suggested Citation

  • Ashley Ward & Belen Zinni, 2024. "The composition of labour input: Sensitivity testing and results for productivity analysis," OECD Statistics Working Papers 2024/06, OECD Publishing.
    • Handle: RePEc:oec:stdaaa:2024/06-en
    DOI: 10.1787/5d9b866a-en
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    More about this item

    Keywords

    growth accounts; hours worked; labour input; multifactor productivity (MFP); productivity;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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