Generation & Benefit Spilover Of Labor Productivity In Turkey Presentation
1. 16th International Input-Output Conference
Istanbul, Turkey, 2-6 July 2007
GENERATION
& BENEFIT SPILLOVER
OF
LABOR PRODUCTIVITY
IN TURKEY
by
NIKOLAOS ADAMOU & SOTIRIOS THEODOROPOULOS
6. Relations
Output (x) is produced because:
([ ])
x = [I − A ]
~
−1
y = h I−A
T T
~
• There is final demand y & industrial demand A
T
• Payments & purchases A are made
h
7. Important issues
Output production & allocation
Employment generation
Productivity (produce more with less)
Payments to factors of production
Wages & Salaries
Profits
Rent & other
8. Underlined principles
Whenever there is a market to sell
PRODUCTION increases
Whenever productivity increases
there is not necessarily
increase in employment
9. Net result
Is there any growth?
Do people have work?
Do they get ‘sufficient’ income
10. General Sectoral Outlook
of the Turkish Economy
Output & Employment relations
Sales
of final products & industrial sales
Payments
for value added & industrial purchases
19. dominant payments
to industrial sectors
Food & Beverages (3)
Construction (18)
Textiles (4)
Electrical Machinery (14)
Iron & Steel (11)
20. dominant payments
to primary inputs
Public Services (23)
Services (22)
Agriculture (1)
Oil Refining (8)
21. Analytical Mechanism
Sales of final products
Sales to industrial sectors
Payments due to purchases
from industrial sectors
Wages
&
Payments for value added
Salaries
Profits
Wages & Salaries
Employment
22. Analytical Mechanism (cont)
x = [I − A ] y = Iy + Ay + A 2 y + A 3 y + L + A n y
−1
[ ]
~ ~ T~2 T ~3 T~n
−1
x =h I − A =h I + h A + h A + h A +L+ h A
T T T T
Utilize the known decomposition of
output generation of similar matrices
23. ( )( )( )
−1 −1 −1 −1
π= L A 2 y+L L An y
Iy + L Ay + L
Analytical Mechanism (cont)
( Iy)+ ( L Ay)+ ( L )
−1 −1 −1 −1
π= L 2 n
A y+L L Ay
π = (h I L )+ (h A L )+ (h A )
~ ~ ~n
−1 −1 −1 −1
+ Lh A L
T T T 2 T
L
Apply the decomposition to the
relationship of output to employment
24. Observation based on the
Productivity Decomposit
Productivity Decomposition
0.10
As productivity
0.08
increases,
0.06
0.04
its direct & indirect
0.02
components
0.00
1973 1979 1985 1990
become more significant
InducedDirect Indirec
25. Most sales
Oil Refining
Allocation Production
are direct
'90
'85
& indirect
'79
to
'73
industrial
1.5 0.5 0.5 1.5
Final Use Direct Req. Indirect Req.
sectors
Value Added Direct All. Indirect All.
Most of the payments are to primary inputs
26. Mahalanobis between
Relationship Distance
productivity & productivity change
5
⎛
⎜ xt +T Lt+ T ⎞
⎟
ln
Oil Refining ⎝ xt Lt ⎠
Λ t,t+ T =
4 T
8
16
Iron & Steel 11 9
3
Other
14
Rubber & Plastics
Electrical Machinery Manufacturing Productivity change
2
5
17
1
Wood & Furniture
Utilities
0
0 1 2 3 4 5
Total Productivity
27. Labor Reduction & Output Expansion
of productivity change
⎧ ln (Lt ) − ln (Lt+ T )⎫ ⎧ ln(x t+ T ) − ln (xt )⎫
Λ t,t + T =⎨ ⎬+ ⎨ ⎬
⎩ ⎭⎩ ⎭
T T
labor reduction output expansion