A country's economic well-being is often quantified through labor productivity. Labor productivity is an hourly measurement of the output generated by each worker. In simpler terms, it indicates how much a worker produces on average in one hour. As the goods and services produced or delivered in an hour increase, so does the general level of productivity which in turn indicates a healthy, expanding economy.
Steps
Method 1 of 2: Calculate Productivity Based on GDP
Step 1. Determine a country's Gross Domestic Product (GDP)
This indicates the quantity of goods and services produced by a state. You will need this data to calculate productivity accordingly.
- Generally you are not asked to calculate GDP, as it is a very complex process; in most cases the value is provided to you or you can easily find it with some research.
- Thanks to the internet you can know the GDP of most countries. You can simply enter the country name followed by the abbreviation "PIL" in the Google search bar. You can also find this data on the World Bank website.
- Make sure that the data refers to the time frame you are considering (for example a quarter or a year).
- Remember that the GDP figure for a given country is always shown on an annual basis, even when it refers to a single quarter. If so, divide the annual figure by four and you'll get the number you're interested in.
Step 2. Calculate the total productive hours for the country
In practice, you have to calculate the number of "working hours" used to produce goods and services. Generally you need to know the number of active workers for the period under consideration and multiply it by the average value of the hours worked.
- For example, if the average number of hours worked is 40 and there are 100 million workers in the country, then the total productive hours is 40 x 100,000,000 or 4,000,000,000.
- As for Italy, you can find these data on the website of the National Institute of Statistics (ISTAT). For other countries, you will need to do an online search.
Step 3. Calculate productivity
Divide GDP by your total productive hours. The result gives you the productivity of the country under consideration.
For example, if a nation's GDP is 100 billion euros and productive hours are 4 billion, then productivity is 100 billion / 4 billion, i.e. a production of goods and services equal to 25 euros per hour
Method 2 of 2: Calculate Labor Productivity
Step 1. Find the Gross Domestic Product (GDP) figure for the country you are looking at
This figure indicates all the economic activity of a nation in terms of goods and services produced. You will need this data to calculate productivity.
- Fortunately, GDP is already calculated by government agencies and is provided as public data.
- You can find the GDP of most countries online as well. Just type the country name in the Google search bar followed by the letters "GDP". Alternatively, you can find the value of your interest on the World Bank website.
- Find the GDP for the period you are looking at (such as a quarter or a year).
- Remember that although the value of GDP is calculated on the quarter, it is always provided as an annual figure, so you will have to divide it by 4 to get the number of your interest.
Step 2. Find the number of workers in the country
To calculate labor productivity, you need to know how many people are employed in a country.
As for Italy, you can find these data on the website of the National Institute of Statistics (ISTAT). If you are analyzing data from other countries, you will need to do some research online
Step 3. Calculate labor productivity
Just divide the GDP by the number of workers. The result will tell you the nation's labor productivity.
