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February 1990, Vol. 113, No. 2
Hours at work: a new base for BLS productivity statistics
Mary Jablonski, Kent Kunze, and Phyllis Flohr Otto
In August 1989, the Bureau of Labor Statistics began publishing productivity statistics and for major sectors of the U.S. economy that are based on a new measure of labor input: hours at work. Previous productivity statistics were based primarily on hours paid, which come from employer payroll records. The switch to hours at work was accomplished with data from one of the newer BLS surveys, the Hours at Work Survey.1
This article reports on the conversion to hours at work and the resulting effects on productivity statistics. It describes the Hours at Work Survey, which yields ratios of hours at work to hours paid, and presents results from the survey. The historical series of ratios constructed for the period prior to the Hours at Work Survey are discussed. The article concludes with a brief description of how the ratios of hours at work to hours paid are used to produce the new hours measures.
Conversion to hours at work
On August 3, 1989, the Bureau of Labor Statistics began using hours at work in its productivity and cost measures for the major sectors: business, nonfarm business, manufacturing, and nonfinancial corporations. All of the measures for these sectors that involve hours were altered, including output per hour and compensation per hour. The measures are published eight times a year in a Department of Labor news release, "Productivity and Costs," and also appear in Bureau of Labor Statistics publications, such as the Monthly Labor Review and Employment and Earnings.2
In the previous measures, hours of all persons consisted of hours paid of employees in the private nonfarm business sector and hours worked of self-employed persons, unpaid family workers, employees of government enterprises, and, in the business-sector measures, farm employees. Hours paid are based on information from the Current Employment Statistics program (also known as the establishment survey), which collects data from firms' payroll records each month. Hours paid of employees accounted for about 85 percent of total hours in the old business-sector hours measure. Hours worked of self-employed persons, unpaid family workers, employees of government enterprises, and farm employees are from the Current Population Survey, a monthly household survey.3
In the new measures, the hours paid of employees in private nonfarm business are replaced by a measure of their hours at work that was developed with the results of the Hours at Work Survey. Because the measure of hours at work excludes paid leave, which is composed of hours that are not devoted to the production process, it is preferred to hours paid as a measure of labor input for productivity statistics.4
This excerpt is from an article published in the February 1990 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 The Hours at Work Survey was first presented in Kent Kunze, "A new BLS survey measures the ratio of hours worked to hours paid," Monthly Labor Review, June 1984, pp. 3-7; in a subsequent research summary, "Hours at work increase relative to hours paid," Monthly Labor Review, June 1985, pp. 44-46, Kunze updated the survey results.
2 Table C-9 in Employment and Earnings continues to show hours paid of employees. This table is prepared by the Bureau's Office of Productivity and Technology, as are the productivity and cost measures.
3 The establishment survey does not cover the farm sector or self-employed and unpaid family workers, so hours worked for those individuals are taken from the Current Population Survey. This survey requests the hours worked in the survey week of each employed person in the household. Because it is a much smaller survey, and because respondents often provide information on household members other than themselves, the Current Population Survey is
4 If hours paid and hours at work grow at the same rate, then for the measurement of productivity growth, it does not matter which measure of hours is used. However, if there is a divergence in the rates of growth over time, using hours paid rather than hours at work will yield an incorrect productivity growth rate.
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