Discussion Paper

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• Discussion Paper
• Multifactor Productivity Contributions of U.S.
  Non-Manufacturing Industry Groups 1987-2005
• by Michael J. Harper, Bhavani Khandrika, Randal
  Kinoshita and Steven Rosenthal
• U.S. Bureau of Labor Statistics
• May 1, 2008

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A Brief History of Multifactor Productivity at BLS
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1990s Attention to Weak Service Sector Data

• Griliches AEA address
• Boskin Commission
• Corrado-Slifman 1999
• New data have become available in recent years

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BEA BLS Collaboration on Production Accounts

• Input part of national accounts
• FHPY Fully integrated set of detailed data from
  which many types of industry and aggregate
  measures emerge
• Current agenda includes expanding aggregate
  measures, comparing industry measures and filling
  in industry
• accounts

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Sectoral Output
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Complete Elements of The Nominal Production
Account
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• Add the Time Element

• Distinguish ps and qs

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Aggregates Real Accounting
Definition AT ST - NIT Aggregate MFP
Results AT Sj1n(VYj/VST) Aj (Domar
1961) Sj1n (VYj/VST) 1
Sj1mSj1nSj1nVNi,j,k/VST
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Negative MFP Trends

• Counts of industries with (-) MFP trends
• 1987-2005 16 of 42
• 2000-2005 13 of 42
• 1977-1997 13 of 32 --- GH 2002
• Limited comparability there is
• now more detail in services

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Negative Productivity Trends

• Effects on private business trend of raising (-)
  to zero
• 1987-2000 0.27
• 2000-2005 0.19
• 1977-1997 0.3 --- GH 2002
• 1977-1992 0.4 --- GH 1999
• 1977-1997 0.4 --- Corrado
  -Slifman1999 (labor
  productivity)

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Negative MFP Trends

• Counts of industries with (-) trends where BLS
  DIPS has coverage
• 1987-2005 2 of 11
• 2000-2005 2 of 11
• Counts of industries with (-) trends where BLS
  DIPS lacks coverage
• 1987-2005 14 of 31
• 2000-2005 11 of 31

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Measuring Non-Manufacturing Productivity Are
we there yet?We may be closer