Labor Productivity


DEFINITION of 'Labor Productivity'

A measurement of economic growth of a country. Labor productivity measures the amount of goods and services produced by one hour of labor. More specifically, labor productivity measures the amount of real GDP produced by an hour of labor. Growing labor productivity depends on three main factors: investment and saving in physical capital, new technology and human capital.


Loading the player...

BREAKING DOWN 'Labor Productivity'

For example, suppose the real GDP of an economy is $10 trillion and the aggregate hours of labor in the country was 300 billion. The labor productivity would be $10 trillion divided by 300 billion, equaling about $33 per labor hour. Growth in this labor productivity number can usually be interpreted as improvements or rising standards of living in the country.

  1. Management By Objectives - MBO

    A management model that aims to improve performance of an organization ...
  2. Marxian Economics

    A school of economic thought based on of the work of Karl Marx. ...
  3. Marxism

    A social, political and economic philosophy that examines the ...
  4. Cost Of Labor

    The sum of all wages paid to employees, as well as the cost of ...
  5. Unofficial Strike

    A work stoppage by union members that is not endorsed by the ...
  6. Official Strike

    A work stoppage by union members that is endorsed by the union ...
Related Articles
  1. Economics

    What is Productivity?

    Productivity is an economic term describing the relationship between outputs as compared to inputs needed to produce those outputs.
  2. Insurance

    An Introduction to Microfinance

    Is microfinance a way to help the poor, or will it just make them poorer?
  3. Economics

    Does High GDP Mean Economic Prosperity?

    GDP is the typical indicator used to measure a country's economic health. Find out what it fails to reveal and how the Genuine Progress Indicator can help.
  4. Retirement

    Two Roads: Debt Or Financial Independence?

    A higher income won't make you richer - unless you learn to live on less.
  5. Fundamental Analysis

    Standard Of Living Vs. Quality Of Life

    What is the difference between a standard of living and quality of life? Find out in this breakdown.
  6. Economics

    5 States with the Highest GDP Per Capita

    Learn about the top five states ranked by their real gross domestic product (GDP) per capita as of 2014: Alaska, North Dakota, New York, Connecticut and Wyoming.
  7. Fundamental Analysis

    Emerging Markets: Analyzing Brazil's GDP

    Examining the GDP composition of one of the BRIC members, Brazil.
  8. Economics

    Time to Worry About a Profit Recession?

    3rd Q earnings season, a weak global economy, a strong dollar and collapsing energy prices suggest that the U.S. may be in the midst of a profit recession.
  9. Economics

    3 Recession Signposts to Watch

    For now, the recent spate of U.S. weakness appears to be a slowdown, not a full-blown recession. However, the risks to the U.S. economy have gone up.
  10. Mutual Funds & ETFs

    Want to Invest in the Philippines? Eye These ETFs

    The Philippines offers more potential than most markets throughout the world. These two ETFs will give you exposure.
  1. How does the neoclassical growth theory predict real GDP?

    Neoclassical growth theory predicts real gross domestic product (GDP) through measures of total factor productivity, capital, ... Read Full Answer >>
  2. Can I stop working to decrease my Substantial Gainful Activity (SGA)?

    In theory, the threshold for receiving Social Security Disability Insurance (SSDI) is the inability to perform meaningful ... Read Full Answer >>
  3. How is productivity calculated?

    Productivity measures the efficiency of a company's production process. It is calculated by dividing the outputs produced ... Read Full Answer >>
  4. Why are the factors of production important to economic growth?

    Real economic growth only comes from increasing quality and quantity of the factors of production, which consist of four ... Read Full Answer >>
  5. What are the economic impacts of specialization?

    Specialization, along with the complementary concept of the division of labor, occurs when the innate inequalities of human ... Read Full Answer >>
  6. Why is productivity an important concept in economics?

    The level of productivity is the most fundamental and crucial determinant of a standard of living. Increased productivity ... Read Full Answer >>
  7. What determines labor productivity?

    Labor productivity is the rate of output per worker within a specified unit of time. Economists and statisticians track labor ... Read Full Answer >>
  8. How much should my profit margins be?

    For many people, identifying and targeting a set profit margin is an important part of their business's pricing strategy. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  2. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  3. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  4. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  5. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  6. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
Trading Center