What can we do with the quality-adjusted labor input data? An explanation with examples

Abstract

This document, by using examples, aims to demonstrate how the quality-adjusted labor input data can be applied for economic analysis in general, and for growth accounting in particular. For instance, such data can be used to improve the estimation of multifactor productivity indicators, and to restore the internal consistency of measuring labor productivity across aggregation levels in the Norwegian national accounts. By constructing meaningful indexes based on such data, the growth of labor input and quality over time can be identified and better understood, at both aggregate and industry level. Given the crucial importance of the quality-adjusted labor input data, the document concludes that it is time for Statistics Norway to compile and publish such data together with other official statistics on a more regular basis.