Keywords: Growth & Innovation; Labour Studies;
New OECD data bases enables the revision updating and extension of an earlier version of Productivity and Employment: New Zealand’s Post-War Economic Growth Performance. It still belongs to a series, Comparison with the OECD and Comparison with Australia.
An earlier version of this paper  used the Maddison data base which had some statistics of employment and hours worked, and allowed it to provide some estimates of productivity. Recently the OECD published a more comprehensive. albeit shorter, data base. This paper revises the earlier paper, incorporating the new data.
The structure of this paper may be summarised in the following truisms
(Output per worker) = (Output per capita) divided by (Employment as a proportion of the population),
(Output per hour worked) = (Output per worker) divided by (Annual hours worked per worker),
where Output is measured as GDP in the same (1990) prices across different countries.
New Zealand in an OECD of 27
OECD (2003) has a reasonably comprehensive data set for our purposes for all 30 OECD countries in 2000, excluding Poland, the Slovak Republic, and Turkey. The per capita GDPs are in Table 1. They are measure in 1996 US dollar prices and are ‘trend’, that is an adjustment has been made for the business cycle.
Table 1: GDP per capita: 2000
The New Zealand GDP per capita is 82.8 percent of the OECD average, or 77.2 percent of the OECD27.
The Worker Force in the Population
Different countries have different proportions of the population who are employed. The ratio is a complicated summary of the effects of the population age structure (a youthful population tends to have a lower ratio, as does one with a lot of retirees), the labour force participation rate for those in the working ages, and the unemployment rate. Table 2 reports the ratios of the Working Age Population to the Total Population, of Employment to Working Age Population, and of Employment to Total Population.
Table 2: Percentage of Employed Total Population: 2000
Pop = population, WAP = working age population; Emp = Employed
There is considerable variation of the proportion of the population who are employed. New Zealand is above the median and 105 percent of the mean. It is below the average for the proportion of Working Age People in the Population, but the higher proportion of Employed People in the Working Age Population compensates for this.
Output per Worker
Combining these two tables gives Table 3, GDP per worker, which is a measure of productivity.
Table 3: GDP per Employed Person: 2000
Because New Zealand has a relatively high labour force utilisation and has a relatively low GDP, its GDP per employed worker is 78.6 percent of the OECD29 average, slightly below the equivalent GDP per capita figure/.
Hours Worked per Worker
Table 4 shows hours worked per employed person in a year.
Table 4: Annual Hours Worked per Worker:2000
New Zealand proves to be the sixth to highest of the OECD27 in terms of hours annual worked per worker, some 1.5 percent, or 27 hours a year above the average.
(Note these figures do not allow for commuting times to work. The 2002 Urban Mobility Report found the following average daily commuting times in minutes: Britain (46) ; Germany (45); Netherlands (43); Greece, Ireland, Sweden (40); Belgium(38); Denmark (37); Austria, France (36); Portugal, Spain (33); Italy (23). The difference between Britain and Italy could amount to an extra 76 hours a year (if the workers commute 200 days a year), sufficient to have Brits spending longer in work related activities than Italians, despite the above tabulation putting it the other way around.
Output per Hour Work
Combining the last two tables gives Table 5 where productivity is measured as output per labour hour.
Table 5: GDP per Hour Worked:
New Zealand is 21st, one rank lower than on GDP per capita, at 74.1 percent of the average.
(Output per Worker Through Time
The OECD gives GDP per person employed for selected periods back to 1970. For the decade to 2000 New Zealand came joint second to bottom (with Switzerland) out of 27 OECD countries – only Mexico was behind. This cant be explained by the New Zealand worker redcuing hours substantially faster than for other OECD countries.)
Table 6 summarises the data.
Table 6: New Zealand as a Percentage of the OECD Average.
The vertical pattern shows that because relatively more New Zealanders work, and because the work relatively longer hours, GDP per employed person and GDP per hour worked is relatively lower. (The horizontal patter shows that the countries with the poorer data bases are also lower productivity ones.
I am not as confident of the robustness of the labour force data as I have with the GDP data (and I have many concerns about that). I will be checking on the employment data base in due course. If there is a conclusion to all this, it is that labour productivity patterns are much as what one might have expected from the relative GDP per capita data – perhaps a little worse, because relatively more of the New Zealand population work, and they work relatively longer hours than the OECD average.
1. B.H. Easton (2002) Productivity and Employment: New Zealand’s Post-War Economic Growth Performance
2. A. Maddison (2001) The World Economy: A Millennial Perspective (Development Centre Studies, OECD)
3. OECD (2003) The Sources of Economic Growth in OECD Countries. Paris.