Low Labor Productivity Research Articles

On the wage–productivity causal relationship

In a perfectly competitive labor market, wage rates are determined by labor productivity, so that wage dispersion reflects the marginal contribution to product of the different workers. Accordingly, wage inequality cannot be treated as an independent variable in a model of productivity, and thus economists have paid little attention to this relation. This paper studies the effects of wage inequality on labor productivity. We claim that wage inequality can lead to lower effort among workers who receive lower wages and hence lead in turn to lower aggregate labor productivity because of the lower aggregate effort level. To guide the empirical analysis, we look at aggregate panel data to investigate whether there is a relationship between wage inequality and average labor productivity. We use data for 34 OECD countries in the period 1995–2007, and by allowing country fixed effects, we exploit the longitudinal dimension of the data. We find that large wage inequality is associated with lower labor productivity. So the results suggest that higher levels of the Gini index of wage inequality are associated with lower labor productivity. Moreover, we study the question of whether wage inequality that causes productivity level or viceversa by assessing non-causal homogeneity in a panel Granger framework.

Analysis of Value Added Distribution of Brown Sugar (Saka) Agroindustry in Bukik Batabuah Village Canduang Sub-district Agam Regency

Rural agroindustry can absorb a relatively high labor rate, but the added value of the products is very low, resulting in low labor productivity. This research aims at describing the process of sugarcane into brown sugar and analyzing the added value of brown sugar agroindustry as well as its distribution in Bukik Batabuah Village, Canduang Agam Sub-district. The data were collected from six brown sugar processing home industries. This research found that there were three kinds of brown sugar namely saka kariang, saka gatah kuniang and saka gatah merah, which were only different in the time of cooking, storage process of tengguli, and heating of tengguli on saka gatah processing. These made the three types of brown sugar have different texture, taste, color and price. From their added value, saka kariang and saka gatah kuniang were classified as medium products, while saka gatah merah was classified as a low product. In addition, this research reveals that the smallest added value distribution was received by paid labors. Based on the findings, the following suggestions are recommended: (1) the brown sugar business should focus on developing a business of saka kariang processing; and (2) the added value of brown sugar could be enhanced by the use of effective and efficient production machinery, so that the added value distributed to the brown sugar agroindustry could be improved

Feeding the world while reducing farmer poverty? Analysis of rice relative yield and labour productivity gaps in two Beninese villages

Abstract Improvements in agricultural land and labour productivity are needed to meet the growing food demand and reduce farmer poverty in sub-Saharan Africa. The objectives of this study were to (i) quantify variation in labour inputs, yield and labour productivity among rice fields; (ii) elicit factors associated with this variation; and (iii) identify opportunities for improving yield and labour productivity. The study was carried out in two contrasting Beninese villages: Zonmon in the south and Pelebina in the north-west. In Zonmon 82 irrigated rice fields were surveyed during the 2013 and 2014 dry seasons. In Pelebina 50 rainfed lowland rice fields were surveyed over three rainy seasons (2012–2014). Data on farmer field management practices and field conditions were recorded through interviews with farmers, on-farm observations and measurements. Stepwise regression analyses were used to identify variables associated with variation in yield, labour inputs and labour productivity. Average yields were 4.8 ± 2.0 t ha−1 in Zonmon and 2.3 ± 1.2 t ha−1 in Pelebina. Average labour productivity, however, was larger in Pelebina (17 kg of paddy rice person-day−1) than in Zonmon (8 kg of paddy rice person-day−1). Relative yield gaps (43–48%) and labour productivity gaps (59–63%) were similar in the villages. There was no trade-off between yield and labour or labour productivity within the villages, suggesting that in many cases rice yields can be increased without additional labour inputs. The major labour-demanding farming operations were bird scaring in Zonmon and harvesting and threshing in Pelebina. We identified opportunities to improve rice yield and labour productivity, given current farmer knowledge and resource endowment. Based on the statistical models fitted per village, increasing the average hill density would result in up to 1.2 t ha−1 more yield, and up to 4 kg person-day−1 greater labour productivity for Zonmon. Increasing the average field size and avoiding rice shading would result in up to 0.8 t ha−1 more yield, and up to 17.1 kg person-day−1 greater labour productivity for Pelebina. Further enhancing yield and labour productivity will require (i) introducing small-scale mechanisation and other labour-saving innovations, in particular for labour-demanding farming operations such as bird scaring in Zonmon and harvesting and threshing in Pelebina; and (ii) combining analyses of yields and labour productivities at field level with detailed analyses of labour use and labour productivity at farm level. We found that, on average, one hectare in Zonmon contributed twice as much to Beninese rice production than one hectare in Pelebina but with a two times smaller reward for farmer labour. This paradox of higher yields but lower labour productivity in such different rice growing environments and farming systems should be addressed in elaborating development policies.

Tax Avoidance by Capital Reduction: Evidence from Corporate Tax Reform in Japan

A new size-dependent tax system was introduced in Japan on April 1, 2004. We exploit this exogenous institutional change as a natural experiment and empirically examine how firms endogenously reacted to a size-dependent tax system in terms of both financial and real activities. Using a large-scale firm-level data over the period from 1996 to 2006, we test several hypotheses obtained from our theoretical model based on financial constraints faced by firms. From our empirical analyses, we obtain the following results that are consistent with the theoretical model. First, firms that originally held stated capital above the threshold set by the new tax system were more likely to reduce their stated capital to the threshold’s level or below after the announcement of the new tax system. Second, firms with lower labor productivity, and smaller asset size were more likely to do so. Finally, firms that reduced their stated capital showed ex-post lower growths in asset size and sales, and the magnitude of which became larger over time. These results suggest that the size-dependent policy induced endogenous capital reduction of a group of firms, which resulted in their lower growth.

Labour commodification, differentiation, and marginalization of the peasantry in Sella Limba (Sierra Leone) from 1950 to the present

AbstractIn Sierra Leone, migration to diamond fields and the development of cash crops have contributed to the increasing integration of the peasantry in the national and global economy. Based on the study of a small northern chiefdom, Sella Limba, we describe how the labour commodification have led to the perversion of “traditional” social relations based on anteriority, and to the break‐up of large domestic groups into smaller, more precarious ones. At the same time, manual agriculture has been marginalized by massive cheap rice imports and remained very low in capital intensity. In this context, we show how low labour productivity curtails opportunities for long‐term social and economic differentiation. Farmers combine “modern” and “traditional” social relations, developing hybrid accumulation strategies that are sometimes close to mere survival.

Labour productivity and its assessment

Labour market is one of the most important factors of economic growth, which is mainly determined by labour productivity. Disparity between wage and growth of labour productivity prevents the economies of the Eastern European countries from growing. Despite the radical economic reforms in Eastern Europe, one can still observe high unemployment rate, low labour productivity, deterioration in the quality of labour. New institutions in the labour market are designed to strengthen and adopt formal institutions, promote stable demand for labour and income policy. The article focuses on a critical analysis of theoretical approaches to labour productivity and empirical assessment of productive efficiency in Kharkiv region. State policy on supporting training and education affects the future opportunities for individuals and the ability of firms to enter new markets and adopt new technologies. It is also supposed to facilitate the allocation of labour by its productivity rate as well as help employees to cope with mobility. Improving the regional investment attractiveness goes hand in hand with enhancing human capital. A skilled workforce is essential for firms to adopt new and more productive technologies, and a better investment climate enhances the returns of investment in education. As firms are offered more opportunities and better access to new technologies, the demand for more skilled workers increases and the firms have stronger incentives to get engaged in growth-enhancing activities, which raise both individual and social returns to education. From the investment climate perspective, the main issues are how labour market interventions influence the opportunities and incentives for firms to invest in a productive way, to create jobs and expand operations. Regulations might reduce incentives for attracting new investments, adjusting the organization of work, taking advantage of new technologies, or hiring more employees.

Human Capital Management and Future of Work; Job Creation and Unemployment: A Literature Review

An enormous amount of literature has emerged over the last few years in the context of the “human capital management”, “Future of Work” and on “Zambian Case: Job creation and unemployment”. The existing literature on the human capital management, the future of work and the Zambian case on job creation and unemployment, covers a wide range of topics. Investment in the human capital enhances performance, employee engagement, innovation and labor productivity. However, it has been observed that the future of work; technology advancement, automation in the transportation and agriculture sector might disrupt economic and social activities in developing countries including Zambia by the year 2026. Nevertheless, despite this wealth of existing studies, some important gaps remain, which should be addressed in future research: 1) Reduction on poverty levels, little is known about the margin by which poverty levels both in rural and urban areas will be reduced by 2021 considering that technological advancements and automation are expected to alter the way of doing business in service sector: transport Sector and manufacturing sector and also the agriculture sector by 2026. 2) Development strategies on human capital development to address the challenges associated with low labor productivity and how technological advancements, automation in the service sector (transportation), manufacturing sector and agriculture sector will sustain jobs that Zambian Government will have created for the locals by the year 2026. 3) Development strategies on human capital development which will ensure that most workers which enter the labor force after dropping out of school, attain basic numeracy, ICT and literacy skills by 2026. 4) Exploring measures to address wage inequality issues in view of off loading robots and use of articial intelligences on the Zambian market which could have potential to widen the gap between highly skilled expatriates and local Zambians.

Concept of Integrative Currency Area and Application to the Central Europe

Euro zone is created along with theory of optimal currency area. This theory is not the only solution that indicates how to integrate countries in the common currency area. The euro area requires that labor productivity is at a similar level. Central European countries, on the other hand, have much lower labor productivity than Western European countries. The question arises about the possibility of creating a currency zone for countries with different levels of productivity. In this paper, it is indicated that there is a positive answer in this matter. However, this requires a rethinking and definition of the basic arrangement of the economic concepts. The paper indicates a method of translating economic values into value of the one currency. The main measurer limiting freedom is the labor productivity index, which cannot decrease what would cause inflation. The lower labor productivity means only that employees have the lower earnings.

КОМПЛЕКСНЫЙ ПОДХОД В ИЗУЧЕНИИ ПРОИЗВОДИТЕЛЬНОСТИ ТРУДА: АКТУАЛЬНОЕ СОСТОЯНИЕ И ПЕРСПЕКТИВЫ ИССЛЕДОВАНИЯ

The problem of low labour productivity is a «chronic» problem for Russia. At the same time, some Rus-sian enterprises increase productivity successfully implementimg to the «rational model of labor rela-tions» implementation. The authors assume that the problem of increasing labour productivity is transdis-ciplinary, and psychology of personality and social psychology should play a significant role in finding the solution to this problem. The working hypothesis of this research is that there are statistically signifi-cant differences in personality traits and professional motivation that determine the specific style of activ-ity of employees of enterprises with different labour productivity. In order to test this hypothesis the au-thors did a study in the summer–autumn of 2018 at two industrial enterprises of the Perm Krai. The study has showed that there are practically no significant differences between the personality traits of the em-ployees who work at the enterprises, and the levels of labour productivity. The only exception is the fac-tor «Openness to Experience» that makes a distinction between the employees of enterprises which might be attributed to specificity of the production processes at these two plants and also to specificity of the sample. It is possible that absence of significant differences between the personality traits of the employ-ees of these enterprises evidences that labour productivity is mainly determined by specific social ties in professional groups. So, the first version of the working hypothesis is not confirmed. It is possible that as-signment of roles and responsibilities, as well as the styles of communication and administration are the predictors of labour productivity.

The impact of human capital and innovation on labour productivity of Malaysian small and medium enterprises

Human capital theory postulates that investment in human capital will increase labour quality and eventually generates higher productivity in an organisation. In small and medium enterprises (SMEs), the quality of workers is still low due to lack of investment in human capital especially in terms of training; and this is the main cause of low labour productivity, hence, leading to weak firm's performance. This article aims to analyse the impact of human capital and innovation on labour productivity by utilising the data of 4,661 manufacturing firms of 2009 in Malaysia. In this analysis, human capital is measured by the ratio of number of professional and managerial employees; and technical and associate professional employees to total number of employees; and total expenses on training; while innovation is measured by total expenses on research and development (R&D) and on information and communication technology (ICT). The result shows that human capital and innovation play significant roles in increasing labour productivity in Malaysian SMEs.

Pengaruh Motivasi dan Gaya Kepemimpinan terhadap Produktivitas Kerja Karyawan pada Perusahaan Cahaya Berlian

Low labor productivity of employees in an organization or company is a symptom or problem that can cause the company is less stable because it can cause the unfulfillment of achievement of corporate goals. This study aims to analyze the influence of motivation and leadership style on employee productivity in company Cahaya Berlian. The population in this research is company Cahaya Berlian employees and the sample used is representative of the population with the number of 100 respondents by using nonprobability sampling technique in data collection. The results showed that the motivation and leadership style partially has significant effect on the performance of employees of company Cahaya Berlian.
 Key words:Motivation, Leadership style, Employee Productivity.

Prevalence of household food insecurity in wetland adjacent areas of Uganda

BackgroundFood insecurity is a critical problem affecting about 6.3% of the households in Uganda, with about 21% of the remaining households on the brink of becoming food insecure due to poverty, inequality and drought-related extreme weather events. Until recently, studies have shown that the semi-arid areas of Uganda experience food insecurity more than other parts of the country. Although wetlands significantly contribute to food security, over 80% of the households inhabiting wetland adjacent areas in Uganda are perceived to be food insecure. The purpose of this study was therefore to determine the prevalence of food insecurity in the wetland adjacent areas of Uganda and the socio-economic and demographic factors that influence household food insecurity in these areas.MethodsA cross-sectional survey of 520 households was conducted in areas adjacent to wetlands in Uganda. One-way analysis of variance and Chi-square test of independence were conducted to determine the association between the socio-economic and demographic characteristics of households and household food security status.ResultsThe study revealed that about 93% of the households in the wetland areas of Uganda were food insecure. Household food insecurity in these areas was significantly associated with the wetland systems, living in a permanent house, group membership and off-farm employment of the household head. Households with fewer adult members were significantly food secure compared with those with more adults. In addition, households headed by educated people were significantly food secure compared with those headed by less educated people.Conclusions Households in the wetland areas in Uganda are generally food insecure, the primary reasons being poverty, low labour productivity (and/or unemployment), and low levels of education. Unless government and civil society promote food and nutrition education, income generating activities, drought resistant crop varieties and water conservation to farmers, food insecurity in wetland areas in Uganda could further drive wetland degradation, malnutrition and public health challenges.

Econometric estimation of labor productivity in the brazilian manufacturing sector in the 2000s:

In the 2000-2008 period, which covers the analysis of this paper, while the average real GDP growth in Brazil was 3.7 percent per year, labor productivity in the manufacturing industry had a negative variation of 1.0 percent per year. In Brazil, there has been a “cliché” evaluation of the relatively low economic growth rates in the period as being the result of low labor productivity growth in the last few decades. However, according to the so-called Kaldor-Verdoorn law, the reverse could also be true: low growth rates of labor productivity in Brazil could be an effect of low growth rates of the real GDP. Based on Kaldorian assumptions, we regressed the change in labor productivity of 21 Brazilian manufacturing industries, covering the 2000-2008 period, on three main variables: the real GDP (which captures the Kaldor-Verdoorn law), gross investment to value added ratio, and technological innovation. Our results confirmed the validity of the Kaldor-Verdoorn law, as the real GDP growth was the most significant variable to explain the behavior of labor productivity in the manufacturing industries in Brazil in the 2000s, followed by the gross investment rate.

Working Long Hours: Less Productive But Less Costly? Firm-Level Evidence From Belgium

From the point of view of a profit-maximizing firm, the optimal number of working hours depends not only on the marginal productivity of hours but also on the marginal labour cost. This paper develops and assesses empirically a simple model of firms' decision making where productivity varies with hours and where the firm faces labour costs per worker that are invariant to the number of hours worked: i.e. quasi-fixed labour costs. Using Belgian firm-level data on production, labour costs, workers and hours, and focusing of the estimation of workers/hours elasticities of isoquant and isocost, we find evidence of the declining productivity of hours, but also of quasi-fixed labour costs in the range of 20% of total labour costs. We also show that industries with larger estimated quasi-fixed labour costs display higher annual working hours and make less use of part-time contracts. The tentative conclusion is that firms facing large quasi-fixed labour costs are enticed to raise working hours (or oppose their reduction), even if this results in lower labour productivity.

Position of the Bakery Enterprises in the Czech Republic According to Detailed Specification of the Businesses

Bakery industry is one of the key sectors within the production of food products; however, there is a decrease of staff and lack of interest in studying or doing business in this branch, which is consistent with below‑average wage. Very low labour productivity associated with labour intensity and a low economic performance of the industry is also characteristic. This article aims to identify whether those unfavourably evolving characteristics are common to the entire industry, or relate only to specific types of businesses and if they differ significantly among these companies. The existence of companies with similar characteristics will be verified based on cluster analysis which will define the key players on the Czech market with bakery and confectionery products. The results show that there were statistically significant differences in most of the evaluated indicators among the companies producing bakery when we classify the companies according to their size, ownership and use of grant funds. According to the cluster analysis, two key players that represent a threat for other groups of companies were identified on the market. In the risk there is mainly a group of micro and small enterprises with family ownership, whose economic position is weak, even if it represents the largest category. Therefore, more attention should be paid to this group of enterprises and focus on their development and access to finance for the development of their business.

Trade and the organization of production: Efficiency and labour market outcomes

This chapter presents novel estimates on the numbers and shares of workers in exporting and importing firms of the formal private sector in 132 countries. It shows that the share of workers employed by exporting firms dropped significantly during the trade collapse caused by the global economic crisis and has stagnated ever since. For the same set of countries, the chapter also documents that exporters and importers are more productive and pay higher wages than their non‐trading counterparts. There is, however, a gap between the productivity and the wage premium of exporting and importing firms, indicating that gains from trade are only partially translated into gains for workers. Within exporting firms, heavy exporters tend to have lower labour productivity and pay lower wages than other exporters, while firms that supply inputs into GSCs have higher productivity and pay higher wages than other exporters. Exporters, especially those that form part of GSCs by assembling final goods, employ more women than non‐exporters, but at the same time tend to have higher shares of temporary employment. Importers are found to employ fewer temporary workers.

From Grass To Meat And Milk: Situation And Prospects In Nigeria

The need for a new world economic order has featured prominently lately in international dialogues. The materially rich nations appear to be getting richer while the poor ones, with all their efforts, could hardly emerge quickly enough from their comparative economic backwardness in a world made increasingly closer and inseparable by unprecedented technological advances in communication and transportation. The economic and material gaps between the developed and the Third World are widening rather than closing. An important barometer, measuring the state of economic and material progress and vigour of a nation relates to the nature and quality of its people’s diet. The industrially-advanced countries of Europe and North America and others in the developed regions consume a large amount of food energy, a high proportion of which derive from proteins of animal origin. The developing nations of Africa, Asia, and Latin America, taken as a group, on the other hand, consume much lower level of food energy and an even much smaller proportion of this comes from animal sources. Within each of the countries constituting these groupings, wide variations occur (Table 3). The economically poor Americans in the U.S.A., for example, as revealed in more recent nutritional surveys, suffer from undernutrition and protein malnutrition just as the bulk of the population enjoy over-feeding with particular reference to the consumption of animal protein and animal fat, an equally important form of malnutrition. In our country, a developing nation, the bulk of the population suffer from malnutrition, while an increasing minority get grossly over-fed. In the one case, malnutrition is a major cause of child mortality and low labour productivity; in the other, a cause of premature adult death among the over-fed minority in many developing nations and the over-fed majority in the Western nations. It is debatable as to which is more disruptive to society. Both forms of malnutrition are undesirable and should be eliminated.

The Forecast of Labour Migration, Reproduction of the Population and Economic Development of Russia

In the medium and long term, at the remaining decline in the population and insufficient development of labour-saving technologies, Russia will be forced to increase its economic potential by the elements of extensive economic development, covering the growing need for labour by migration gain. In this context, an important task of public administration is to increase the efficiency of regulation of the international labour migration in the regions of Russia taking into account features of their demographic and economic development. That makes relevant the forecasts of interdependent development of migration, the reproduction of the population and of the regional economy of Russia. In the article, for the first time, the author proposes the complex model allowing such forecasting by means of the dynamic system of equations including matching function, the Cobb–Douglas production function and etc. The computer program which is characterized by a high speed of data exchange with statistical bases, calibration and forecasting, a wide choice of services for representation of the received results has allowed to automate the realization of the complex model with the use of the Java/Javascript language. As a result of the implementation of the complex model for statistical data, I made the forecast of labour migration, reproduction of the population and economic development of Russia until 2003. According to the received forecast, even at the maximum use of the potential of labour migration from the CIS countries, the total number of the labour of the Russian Federation by 2030 will be reduced almost by 5 % relatively to 2016 and will be equal to 74684 thousand. At the same time, the absolute deficiency of labour force will be followed by the growth of unemployment rate from 5.8 % to 7.1 %. The predicted situation demonstrates the increase of the structural imbalance of supply and demand in labour market as the abilities of job seeker do not meet the requirements of available vacancies. Except the personnel problems, the growth of the Gross Domestic Product of Russia during the forecast period will be slowed down by the low labour productivity as the result of the labour-intensive type of economy with a high share of manual skills, which has remained from the Soviet period.

Can Low Payroll Growth Cause Low Productivity Growth?

Liberal think tanks claim that low growth in US wages is reducing incentives for labor-saving innovation and hence creating low labor productivity. Since conservatives reject this, a recent New York Times article stated that economists have a chicken or egg problem here. This paper uses modern statistical tools from a newer R package 'generalCorr' which allows for control variables to help settle the issue. Briefly, we compute a weighted index summarizing causal path results from three criteria: (Cr1) lower absolute gradients, (Cr2) lower absolute residuals, both quantified by stochastic dominance of four orders, and (Cr3) from goodness of fit of flipped non-parametric kernel regressions. We include our R code here allowing the user to extend the methods to any scientific problem.

The Effect of Permanent Employment on Absenteeism: Evidence from Labor Reform in Spain

Restrictive employment protection legislation has been highlighted as a key reason for lower labor productivity in Europe compared to the United States. Evidence in the literature has shown robust effects of employment protection on effort, though the effects appear too small to generate marked cross-country differences in labor productivity. The authors revisit this issue using representative data of private-sector workers in Spain. A range of legislative changes aimed at reducing the incidence of temporary employment are used to estimate the effect of permanent employment on one aspect of effort, absenteeism. Results suggest that being employed on a permanent contract increases the probability of being absent from work due to sickness by approximately 5.3 percentage points and the time absent by approximately 0.30 of a day per week. These results suggest that cross-country differences in employment protection have the potential to have a substantial impact on labor productivity.