Productivity
Real gross domestic product (GDP) per hour worked, expressed in 2023 US dollars.
Why did we include this measure?
It is not just how much we produce that matters but how much time we need to put into it. Productivity growth is one of the main drivers of overall economic growth and signals increases in human and physical capital and innovations in products, technology, management, and work processes. This allows us to increase our material prosperity while also having leisure time to rest, exercise, vacation, and spend time with our families and friends and in civic and community activities.
How does the US rank globally?
- Specific Measure: Real GDP per hours worked, 2017 international dollars (PPP).
(Source: Authors’ analysis of International Labor Organization data).
- Percentage of countries the US outperforms: 88% (out of 101 countries)
- International Rank Trend: Improving
National Trend Improving
What do the data show?
Both the domestic and international trends have been moving in a positive direction. We are also near the top in the world in worker productivity, though eleven countries are above us. (The countries just above us are Guyana, Sweden, and Singapore.) Again, given the close connection between productivity and GDP, it is no surprise that they are moving in tandem.
What might explain these patterns?
Productivity improves because of a combination of factors. Firms can develop and invest in new production technologies and improve workplace organization, while workers may enter the workforce with greater general skills (human capital) or specific skills better matched to firm needs.
Among the smaller group of high-income countries with both strong GDP and productivity, the US leads in terms of both. This appears to be due to a combination of our large population size, historical investments in education and business capital, culture of hard work, innovation, entrepreneurialism, relatively stable democratic government, free market policies, national security, and other advantages.
For more information about data sources and treatments, download the Data Notes.