A New PPP Benchmark and its Implications for Changing Economic Leadership

ABSTRACT: This paper presents a new benchmark of output and relative prices (PPPs) for agriculture, mining and five manufacturing branches in the US, UK, France and the Netherlands around 1910. The Fisher-weighted PPPs are constructed according to the industry-of-origin approach in order to assess comparative levels of output per worker. The sectoral estimates are subsequently used to build up a comparison of output per worker and per head at the total economy level. Our main findings are that the levels of labour productivity and per capita GDP in the Western European countries relative to the US have been overestimated in the literature so far. Backward projection into the nineteenth century sheds new light on the timing of the take-over in productivity and income leadership between the Netherlands, UK and US. In terms of GDP per capita, the US took over the UK between 1879 and 1899, while in terms of labour productivity the US was already world leader around 1850. Also the Dutch economy seems to have lost its economic leadership earlier than hitherto has been assumed.

AUTHORS: Ewout Frankema, Jan Pieter Smits and Pieter Woltjer

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Data

The data-set for this working paper is split into four parts: (1) an overview of the nominal value added and employment by sector for France (FR), the Netherlands (NL), the United Kingdom (UK) and the United States (US) for ca. 1910; (2) the product prices making up the PPPs for the UK and US; (3) the product prices for the NL and US; (4) the product prices for FR and the US. All data are at the 2-digit or 3-digit industry level.

file variables countries years # obs.
icn_excel wp_comparative_productivity_app_B va, emp FR, NL, UK, US 1909 192
icn_excel wp_comparative_productivity_app_C1 uvr, ppp UK, US 1909 327
icn_excel wp_comparative_productivity_app_C2 uvr, ppp NL, US 1909 120
icn_excel wp_comparative_productivity_app_C3 uvr, ppp FR, US 1909 192

 

IMPORTANT: The data underlying ‘Comparative Productivity …‘ are freely available as long as the article is cited appropriately (see below).

Sources and Methods

A detailed description of the primary and secondary sources used to calculate Purchasing Power Parities and estimate comparative labor productivity are provided in the PDF file below.

file description
icn_pdf wp_comparative_productivity_app_A Overview of primary and secondary sources

 

IMPORTANT: The sources and methods underlying ‘Comparative Productivity …‘ are freely available as long as the article is cited appropriately (see below).

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Available at: Groningen Growth and Development Centre
Journal: GGDC Research Memoranda, No. 113
DOI:
Get PDF: “Comparing Productivity in the Netherlands, France, UK and US”

Cite

MLA Frankema, E., J. P. Smits, and P. Woltjer. “Comparing Productivity in the Netherlands, France, UK and US, ca. 1910: A new PPP benchmark and its implications for changing.” Groningen Growth and Development Centre Memorandum 113 (2010): 1-34.
APA Frankema, E., Smits, J. P., & Woltjer, P. (2010). Comparing Productivity in the Netherlands, France, UK and US, ca. 1910: A new PPP benchmark and its implications for changing. Groningen Growth and Development Centre Memorandum, 113, 1-34.
Chicago  Frankema, E., J. P. Smits, and P. Woltjer. “Comparing Productivity in the Netherlands, France, UK and US, ca. 1910: A new PPP benchmark and its implications for changing.” Groningen Growth and Development Centre Memorandum 113 (2010): 1-34.
Harvard Frankema, E., Smits, J.P. and Woltjer, P., 2010. Comparing Productivity in the Netherlands, France, UK and US, ca. 1910: A new PPP benchmark and its implications for changing. Groningen Growth and Development Centre Memorandum, 113, pp.1-34.
Vancouver Frankema E, Smits JP, Woltjer P. Comparing Productivity in the Netherlands, France, UK and US, ca. 1910: A new PPP benchmark and its implications for changing. Groningen Growth and Development Centre Memorandum. 2010;113:1-34.

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