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Since 1983-84, the volume of Market sector labour input has grown by 1.3% per year on an hours worked basis, and by 1.6% per year on a quality adjusted hours worked basis (experimental series). This reflects a 0.3% per year improvement in the quality of labour over the period, measured in terms of educational attainment and work experience. The faster growth in the quality adjusted input measure is reflected in the lower growth in quality adjusted productivity measures, relative to unadjusted estimates. That is, some of the growth in the unadjusted measure can be attributed to quality changes which are explicitly measured in the quality adjusted measures.
Productivity growth cycles
A common method of examining changes in productivity over an extended period involves identifying and dividing the data into productivity 'growth cycles'. Year to year changes in productivity, as measured, may reflect changes that are conceptually distinct from the notion of productivity. In particular, changes in the degree to which businesses are utilising their capital stock would ideally be recorded as changes in the capital services inputs. As there is insufficient information to implement such an adjustment it is assumed for the purpose of measurement that this capital is utilised at a constant rate. This means that year to year changes in estimates may not be truly indicative of a change in productivity. By analysing average productivity statistics between growth cycle peaks, the effects of some of these influences can be minimised allowing better analysis of the drivers of growth in different periods.
3 The long term trend estimates are calculated using an 11-term Henderson moving average of the original, annual indexes. Back
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