Friday, January 28, 2011

Krugman Compares France and the US

Paul Krugman:

So, here are some ratios of France to the United States:
GDP per capita: 0.731
GDP per hour worked: 0.988
Employment as a share of population: 0.837
Hours per worker: 0.884
So French workers are roughly as productive as US workers. But fewer Frenchmen and women are working, and when they work, they work fewer hours.
Why are fewer Frenchmen working? As I’ve pointed out, during prime working years they’re as likely to work as Americans. But fewer young people work (in part because of more generous college aid); and, mainly, the French retire earlier. The latter is arguably the result of misguided policies: Mitterand made early retirement alarmingly attractive. But it’s not a problem of weak productivity or mass unemployment.
And why do the French work shorter hours? Probably for the most part because of government policies mandating vacation time.
The bottom line is that France is a society with the same level of technology and productivity as the US, but one that has made different choices about retirement and leisure. Vive la difference!

3 comments:

TexExile said...

Art,

I am afraid you are mistaken in seeing no link between productivity and participation rates/hours worked.

In just about any economy, increases in participation rates are associated with lower productivity per worker. Economies with large numbers of working-age adults outside the workforce (or unemployed) are typically employing their MORE productive citizens, with the less productive being out of work.

Likewise, when working hours go down, hourly productivity tends, ceteris paribus, to rise -- even if productivity per worker falls. (Hourly productivity rose when the 35-hour week was introduced, for example.) Workers are less fatigued, certain tasks have to be performed regardless, so less time is wasted, etc.

So the hourly productivity numbers should not be taken to imply that French productivity would match US productivity if employment rates and hours worked converged.

Pedantically yours,

Tex

Arthur Goldhammer said...

That's a quote from the Nobel laureate in economics, Tex. Your quarrel is with him, not with me.

TexExile said...

I still ain't buyin'...