ECON10003 Lecture Notes - Lecture 15: Workforce Productivity, Marginal Product, Measurement Problem

• School: University of Melbourne
• Department: Economics
• Course: ECON10003
• Professor: Laurence

Document Summary

Some economic history: relatively little economic growth prior to 1750 relatively little dispersion in income per person across countries. Why study economic growth: output per capita is an important determinant of things we care about, health and nutrition, output correlated with increased life expectancy, reduced infant mortality, education, reduced child labour. Growth matters: small differences in growth rates lead to large differences in outcomes overtime. Japan: income was 25 per cent of australian income in 1870. Now broadly similar and this convergence occurred only after ww2: argentina: income was 75 per cent of australian income in 1900. Now, only 33 per cent: china: income was 7 percent of australian income in 1980. Determinants of output per capita: consider the following decomposition, where (cid:1867)(cid:1868)(cid:1873)(cid:1864)(cid:1872)(cid:1867)(cid:1866)=(cid:1851) (cid:1851) (cid:1867)(cid:1868)(cid:1873)(cid:1864)(cid:1872)(cid:1867)(cid:1866, is the number of employed workers, is the level of labour productivity that is, output per worker (cid:3042)(cid:3043)(cid:3048)(cid:3047)(cid:3042)(cid:3041) is the employment to population ratio. Recent growth in labour productivity: some comments on post-gfc growth.