EconPapers    
Economics at your fingertips  
 

The Widening Canada-US Productivity Gap in Manufaturing

Jeffrey Bernstein, Richard Harris and Andrew Sharpe

International Productivity Monitor, 2002, vol. 5, 3-22

Abstract: In this article, Jeffrey I. Bernstein of Carleton University, Richard G. Harris from Simon Fraser University, and Andrew Sharpe from the Centre for the Study of Living Standards provide a comprehensive analysis of the widening of the Canada-US manufacturing productivity gap. Since 1994, labour productivity growth in manufacturing in the United States has greatly exceeded that recorded in Canada. Output per hour in Canada fell 20 percentage points from 87 per cent of the US level in 1994 to 67 per cent in 2001. This development has been responsible for most of the widening of the aggregate Canada-US labour productivity gap. The authors find that the growth in the gap largely reflects the acceleration of productivity growth in US high-tech manufacturing sector. The Canadian high-sector is smaller than its US counterpart and experienced much weaker productivity growth. It is estimated that these two factors themselves account for 70 per cent of the widening of the gap over the 1994-2000 period. Faster growth in capital intensity of production in the United States also played a complementary role in the growth of the gap, a development in part fostered by the greater increase in the price of labour relative to that of investment goods in the United States than in Canada. This was due to slower labour compensation growth and, to a lesser extent, a smaller decline in the price of investment goods in Canada. The depreciation of the value of the Canadian dollar relative to the US dollar played some role in this latter development. The authors conclude that Canadian economic policies have not directly contributed in any significant manner to the widening of the gap.

Keywords: Canada; United States; Manufacturing; Labor Productivity; Labour Productivity; Productivity; Employment; Capital Intensity; Technological Change; Innovation; High-Tech; Capacity; Cyclical; Investment; Relative Price; Relative Price of Labour; Relative Price of Investment (search for similar items in EconPapers)
JEL-codes: L60 J24 O51 J23 D24 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10) Track citations by RSS feed

Downloads: (external link)
http://www.csls.ca/ipm/5/mfg-e.pdf (application/pdf)
http://www.csls.ca/ipm/5/mfg-f.pdf version en francais, pp:3-24 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sls:ipmsls:v:5:y:2002:1

Ordering information: This journal article can be ordered from
http://www.csls.ca

Access Statistics for this article

International Productivity Monitor is currently edited by Andrew Sharpe, Executive Director

More articles in International Productivity Monitor from Centre for the Study of Living Standards 170 Laurier Ave. W, Suite 604, Ottawa, ON K1P 5V5. Contact information at EDIRC.
Bibliographic data for series maintained by CSLS ().

 
Page updated 2020-01-20
Handle: RePEc:sls:ipmsls:v:5:y:2002:1