Labour productivity is defined by the OECD to be "the ratio of a volume measure of output to a volume measure of input" OECD Manual: “Measuring Productivity; Measurement of Aggregate and Industry-Level Productivity Growth.” (2002) Volume measures of output are normally
GDP or
GVA (Gross Value Added), expressed at constant prices i.e. adjusted for inflation. The three most commonly used measures of input are: hours worked; workforce jobs; and number of people in employment. Measured labour productivity will vary as a function of both other input factors and the efficiency with which the factors of production are used (total factor productivity). So two firms or countries may have equal total factor productivity (productive technologies) but because one has more capital to use, labour productivity will be higher.
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Labor productivity refers to the relationship between output and the labor time used in generating that output. It is the ratio of output per hour.
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