Welcome GuestLogin
RSS

Navigation





Search the wiki
»

Contents

GOAL AND TARGET ADDRESSED

Goal 1. Eradicate extreme poverty and hunger. Target 1.B Achieve full and productive employment and decent work for all, including women and young people.

DEFINITION AND METHOD OF COMPUTATION

Definition
The growth rate of gross domestic product (GDP) per person employed is defined as the growth rate of output per unit of labour input.

This indicator is expressed as a percentage.

Concepts
Gross domestic product (GDP) is the sum of gross value added by all resident producers in an economy, plus any product taxes, and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

Employed refers to persons above the nationally defined working age (different in every country, but generally close to 15 years) who worked or held a job during a specified reference period. Included are persons who worked for pay or profit (or pay in kind); persons who were temporarily absent from a job for such reasons as illness, maternity or parental leave, holiday, training or industrial dispute; and unpaid family workers who worked for at least one hour, although many countries use a higher hour limit in their definition. The measure of employment is intended to capture persons working in both the formal and informal sectors and households.

Output, is measured as value added, which is total production value minus the value of intermediate inputs, such as raw materials, semi-finished products, services purchased and energy inputs. Value added, referred to as gross domestic product (GDP) in the national accounts, represents the compensation for input of services from capital (including depreciation) and labour directly engaged in production.

Labour input is measured as the number of persons employed, also known as total employment.

Method of computation
The growth rate of GDP per person employed is equivalent to the growth rate of labour productivity. Labour productivity is measured as output per person employed. The following formulas are used in calculating this indicator:

Image
Image

GDP is measured at market prices for the aggregate economy. This reflects the market value of the output produced. Labour input is measured in units of persons employed.

RATIONALE AND INTERPRETATION

Labour productivity can be used to assess the likelihood of a country’s economic environment to create and sustain decent employment opportunities with fair and equitable remuneration. While increases in productivity do not guarantee progress toward full and productive employment and decent work for all, improvements in conditions of work and employment opportunities are less likely to occur without productivity improvements.

There is empirical evidence that the link between productivity growth and poverty reduction is strong when productivity growth and employment growth go hand in hand. However, labour productivity growth is not always associated with employment growth. Consequently, measuring both growth in employment (see employment-to-population ratio, Indicator 1.5) and labour productivity is required to assess whether GDP growth is likely to reduce poverty.

Labour productivity growth relies on a number of factors including: increased efficiency in the use of labour; increased use of physical or human capital or intermediate inputs; and shifts in the mix of activities in the economy. For instance, an economy might shift from sectors and activities with low levels of productivity to sectors and activities with higher levels. In this case, it is important that labour productivity growth is accompanied by improvements in education and training systems so that the workforce is prepared to work in the new sectors.

SOURCES AND DATA COLLECTION

GDP measures are obtained from national accounts and represent, as much as possible, GDP at market prices for the aggregate economy. Guidelines for measurement of GDP are outlined in the United Nations System of National Accounts (1993).

Employment data are obtained from population censuses, labour force or other household surveys, establishment surveys, administrative records and official estimates based on results from several of these sources. Labour force surveys can be designed to cover virtually the entire population of a country, all branches of economic activity, all sectors of the economy, and all categories of workers, including own-account workers, unpaid family workers and persons engaged in casual work or marginal economic activity. For this reason, household-based labour force surveys offer a unique advantage for obtaining information on the labour market of a country and its structure.

Other sources such as population censuses and administrative records differ in scope, coverage, units of measurement and methods of data collection. Labour force and household surveys may have limited geographical and population coverage. Each source has advantages and limitations in terms of the cost, quality and type of information gained. The ideal geographic coverage is the entire country (no geographic exclusions) and entire populations (no exclusion of population groups).

DISAGGREGATION

For the purpose of this indicator, no disaggregation is required. However, disaggregation of the growth rate of GDP per person employed by economic sector can be used to differentiate between high and low productivity sectors which can serve to monitor the effects of policies to increase labour productivity through sectoral shifts.

COMMENTS AND LIMITATIONS

Estimates of employment generally refer to the average number of persons with one or more paid jobs during the year. Statistics on the number of self-employed and family workers in agricultural and informal manufacturing activities are often less reliable than those for paid employees, particularly in low- and middle-income economies. Employment estimates are also sensitive to under-coverage of informal or underground activities, which account for a substantial part of labour input. In some cases, informal activities are not included in production and employment statistics at all. In agriculture, labour force estimates do include a substantial part of the (part time and seasonal) labour input of family workers.

GENDER EQUALITY ISSUES

As GDP is not measured by sex, it is not possible to disaggregate this indicator by sex. Indicators 1.5 and 1.7 provide for disaggregation by sex in order to obtain insights into the employment status of women (and young people) as called for in Target 1.B.

DATA FOR GLOBAL AND REGIONAL MONITORING

The International Labour Organization (ILO) produces estimates for this indicator. The necessary data are obtained largely from international data repositories compiled by various international organisations.

The GDP estimates for Organisation for Economic Cooperation and Development (OECD) countries after 1990 are mostly obtained from OECD and the Statistical Office of the European Communities (Eurostat). Angus Maddison’s publication, The World Economy: Historical Statistics, has been used to cover the period 1980-1990. Employment estimates are mostly taken from OECD, Eurostat and the Bureau of Labour Statistics (BLS).

For countries outside of the OECD, the national accounts and labour statistics assembled from national sources by the World Bank, the Asian Development Bank, the Food and Agriculture Organization of the United Nations (FAO), the ILO and the United Nations Statistics Division are mostly taken as the point of departure.

Data collected from international repositories should be internationally comparable. GDP measures are obtained from national accounts and represent, as much as possible, GDP at market prices for the aggregate economy and value added at basic prices for the individual sectors. However, there are significant problems in international consistency of national accounts estimates. Such problems include different treatment of output in services sectors, and different procedures in correcting output measures for price. All estimates are therefore made according to the national accounts conventions to ensure that labour productivity for individual sectors can be compared. For international comparisons of labour productivity, estimates of gross value added are always expressed in PPP for the aggregate economy in terms of 1990 United States dollars.

ILO produces aggregate estimates for regions and groups of countries. Not all countries report data for every year, so it is not possible to derive aggregate estimates of labour market indicators by merely summing across countries. To address this problem, the ILO maintains econometric models which are used to produce estimates of labour market indicators in the countries and years for which no real data exist. These models use multivariate regression techniques to impute missing values at the country level.

There are some potential disparities between international and national data. Primarily, the use of different data sources can create comparability issues. National labour force surveys tend to be similar in essential features. Nevertheless, survey data may contain non-comparable elements in terms of scope and coverage or variations in national definitions of the employment concept.

SUPPLEMENTARY INFORMATION

No information available yet.

EXAMPLES

No information available yet.

REFERENCES

International Labour Organization (annual). Global Employment Trends. Geneva. Available from http://www.ilo.org/trends.

International Labour Organization (annual). Key Indicators of the Labour Market. Geneva. Available from http://www.ilo.org/kilm.

International Labour Organization. Laborsta —an International Labour Office database on labour statistics operated by the ILO Department of Statistics. Internet site http://laborsta.ilo.org.

International Labour Organization (various years). Report of the Director-General to the International Labour Conference. Geneva. Available from http://www.ilo.org/global/What_we_do/Officialmeetings/ilc/lang--en/index.htm.

International Labour Organization (annual). Yearbook of Labour Statistics. Geneva. Available from http://laborsta.ilo.org.

International Labour Organization (2009). Guide to the New Millennium Development Goals Employment Indicators: including the full Decent Work Indicators. Geneva. Available from http://www.ilo.org/trends.

Organisation for Economic Co-operation and Development (annual). Labour Force Statistics. Paris. Available from http://www.sourceoecd.org/database/employment.

Organisation for Economic Co-operation and Development (annual). National Accounts. Paris. Internet site [^http://www.oecd.org/std/national-accounts

ScrewTurn Wiki version 3.0.4.560. Some of the icons created by FamFamFam.