Public Enterprise Revisited

Public Enterprise Revisited

A Closer Look at the 1954–79 UK Labour Productivity Record

Chrisafis H. Iordanoglou

The book compares the 1954–79 labour productivity record of 5 expanding public sector industries to that of 24 expanding, capital intensive, mass-production industries in the British private sector. The author shows that the public sector industries’ labour productivity growth was significantly faster than that of the private sector industries. Strikingly, he also finds that the state-owned industries were narrowing their productivity gap with their US counterparts at a significantly faster rate than the private sector industries. Dr Iordanoglou concludes that it is possible that public ownership had – in the historical period investigated – a long-term positive effect on these industries.

Appendix D: International labour productivity comparisons

Chrisafis H. Iordanoglou

Subjects: economics and finance, industrial organisation, labour economics

Extract

INTRODUCTION The principal purpose our international comparisons are intended to serve is the study of the evolution during the 1950s, 1960s and 1970s of the US–UK labour productivity gap in the 29 three-digit-level industries of our sample. The changes in the productivity gap will permit us to examine whether the UK public sector industries tended to close the productivity deficit relative to their US counterparts systematically faster or slower than the UK private sector industries. Given that our principal aim is to study changes in the productivity gap, the consistency over time of our estimated labour productivity ratios is of paramount importance. We must make sure that we are measuring the same concept on the basis of the same index formula. The coverage of the variables involved has to be identical throughout the years and the definitions of the particular industries under comparison must remain unchanged. Finally, we must ensure that, for each individual industry, the same estimation methods have been applied throughout. The precise meaning of the above requirements will be clarified as we proceed. For the moment it suffices to say that, to my knowledge, none of the available studies satisfies the above requirements. There are five major studies in which a wide-ranging attempt has been made to measure the comparative US–UK labour productivity performance at the three-digit industry level. Those studies are the following: 1. Rostas, L.: Comparative Productivity in the British and American Industry, NIESR Occasional Paper 13, Cambridge...

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