Labor Input and Capital Services:
BLS contribution to KLEMS
production accounts for the
United States
Susan Fleck, Division Chief
Fleck.susan@bls.gov
Division of Major Sector Productivity
Office of Productivity and Technology
Bureau of Labor Statistics
Presented at World KLEMS Conference
August 19-20, 2010
BLS
U.S. Bureau of Labor Statistics
Production accounts
 The Bureau of Labor Statistics (BLS) has
published multifactor productivity (MFP)
measures since 1983
 BLS is collaborating with the Bureau of
Economic Analysis (BEA)
BLS recently provided measures of
labor input and capital services for a
production account prototype
BLS
www.bls.gov
BLS productivity measures
published in news releases
 Labor productivity
(>50 years in time series)
Business and nonfarm business,
manufacturing subsectors, numerous 4and 5- digit industries, nonfinancial
corporations
 Multifactor productivity (23 years in time series)
Private business and nonfarm business,
manufacturing sectors and subsectors,
and select 4- and 5- digit
manufacturing industries
BLS
www.bls.gov
BLS productivity measures available
periodically or upon request
 Labor productivity
Total economy
- Labor hours
 Multifactor productivity
Nonmanufacturing sectors and
subsectors
Total economy
- Capital services
BLS
www.bls.gov
KLEMS inputs
measurement work
 K – capital services
Detailed asset types weighted using
rental prices
Inclusion of IT capital as a separate
category showed the high tech effect
on productivity speed up
BLS
www.bls.gov
KLEMS inputs
measurement work
 L – Labor input
Apply concept of hours worked using hours
worked/hours paid ratios
Count all hours worked per job
Account for supervisory hours
Moved to Jorgensen-Ho-Stiroh method of
calculating labor composition with actual
wages
BLS
www.bls.gov
KLEMS inputs
measurement work
 M - Materials
Recent study shows that shifts to
imported intermediate inputs account
for 0.92 of the 3.96 percent per year
growth in manufacturing labor
productivity (See Eldridge and Harper, “Effects of
imported intermediate inputs on productivity”, Monthly
Labor Review, June 2010, pp. 3-15)
BLS
www.bls.gov
KLEMS inputs
measurement work
 S – Services
Added the ‘S’ to KLEMS in 1987
(see Gullickson
and Harper, “Multifactor productivity in U.S. manufacturing, 1949–83,” Monthly
Labor Review, October 1987, pp. 18-28)
Expanded and improved the
measurement of service sector
productivity (see Harper, Khandrika, Kinoshita, and Rosenthal
“Nonmanufacturing industry contributions to multifactor productivity 19872006”, Monthly Labor Review, June 2010, pp. 16-31)
BLS
www.bls.gov
Developing labor and capital
data for production accounts
 BLS objective
Collaboration with BEA
Labor composition for industries
Consistency across all BLS productivity
measures
BLS
www.bls.gov
Collaboration with BEA
 "Integrated GDP-Productivity Accounts,“
by Michael J. Harper, Brent R. Moulton,
Steven Rosenthal, and David B.
Wasshausen
 Recently provided labor and capital
services data for prototype industry
account
BLS
www.bls.gov
Labor composition
 Regularly publish and update labor
composition for private business sector
 Investigate industry level measures of
labor composition
 Exploratory research with Jorgensen and
associates to see if we can replicate
results
BLS
www.bls.gov
Consistency
 Improve internal consistency of concepts,
sources, and methods with BLS industry
and major sector productivity datasets
 Create a comprehensive dataset of labor
and capital input that complements output
data from detailed industries to total
economy
BLS
www.bls.gov
Consistency
 Hours
Detailed industry concept of hours paid
Major sector and subsector concept of
hours worked
 Project
Investigate methods using existing
data that provide reliable hours worked
measures for detailed industries
BLS
www.bls.gov
Consistency
 Labor composition
MFP measures for private business and
nonfarm business are published, but
not for other sectors or industries
 Project
Research different methodologies with
more data sources to expand labor
composition measures to industry level
BLS
www.bls.gov
Consistency
 Capital services
BLS
www.bls.gov
Detailed industry data are limited to
manufacturing by National Accounts
coverage
Government has no returns to
government capital in National
Accounts
 Project
Investigate methods using existing
data to improve capital services for
detailed industry and total economy
Consistency
 Output
Concern over measurement of output
in services
 Project
Maintain BLS production and
publication of output based on a
quantity rather than price measure
BLS
www.bls.gov
Additional projects
 Research impact of newly published CES
data on all employee hours paid compared
to existing methodology
 Create dataset of capital inputs that
includes nonprofit sector to improve
consistency with BEA industry coverage
BLS
www.bls.gov
Conclusion
 Plenty of work remains to improve data
sources and methods for comprehensive
labor and capital inputs in a production
account framework
BLS
www.bls.gov