ABOUT THIS RELEASE
The measurement of labour inputs is an important consideration in the calculation of labour or multifactor productivity. This paper applies the Labour Composition Model (LCM) - first proposed by the U.S. Bureau of Labour Statistics - to improve the measurement of labour inputs in Australia. Previous Australian measures have assumed that labour is a homogeneous input. The LCM is used to take account of two important aspects of labour "quality" - education and work experience - in the construction of experimental estimates of Quality-adjusted Labour Inputs (QALI). The QALI estimates may then be used to compute experimental estimates of labour and multifactor productivity.