Indian labour productivity rising: ILO

India, China and Pakistan figure in the list of countries that have achieved growth in productivity in 2002, which is topped by the United States after a gap of several decades, according to a new study by the International Labour Organisation.

While India, China, Pakistan and Thailand in Asia registered slight increase, productivity of the US accelerated in 2002, surpassing Europe and Japan in terms of annual output per worker for the first time since World War II, the study says.

In Key Indicators of the Labour Market, the ILO notes that part of the difference in output per worker was due to the fact that Americans worked longer hours than their European counterparts.

Workers in the US put in an average of 1,815 hours in 2002 compared to major European economies, where hours worked ranged from around 1,300 to 1,800. In Japan, hours worked dropped to about the same level as in the US, it adds.

In other key findings, the KILM shows that growth in productivity per person employed in the world as a whole accelerated, from 1.5 per cent during the first half of the 1990s, to 1.9 per cent in the second half.

Most of this growth was concentrated in industrialised economies (the US and some EU countries), plus some in Asia (China, India, Pakistan and Thailand).

In Africa and Latin American economies, available data showed declines in total economy productivity growth since 1980.

European and other industrialised countries - while achieving slightly lower productivity growth rates on average than the US - had improved their "employment-to-population ratios" which measures the proportion of people in the population who are working.

While unemployment rates in the EU as a whole remained above those in the US, many European countries were able to maintain or improve their ability to create jobs, while achieving moderate growth in productivity. The EU increased the employment-to-population ratio from 56.1 to 56.7 per cent between 1999 and 2002 while reducing unemployment, the KILM says.

Although the employment-to-population ratio in the US declined by 1.6 - from 64.3 to 62.7 per cent in the same period, overall it remained consistently higher than the EU.

Over the longer term, the US economy has had higher employment and productivity growth rates than the EU. Thus, the report shows that positive development in job creation and productivity are possible over the longer term.

The KILM examines 20 key indicators of the labour market, including employment, unemployment, underemployment, hours worked, labour productivity, types of economic activity and how youth and women are faring in the labour markets.

For the first time, the KILM has also examined agricultural productivity and notes that this sector remains the primary employer in many developing economies.

The new analysis suggests that a rise in productivity and employment may be the only way to reduce poverty.

"The overall global trends show that growth is not enough," said ILO Director-General Juan Somavia. "We must make productivity growth and job creation key objectives and pursue policies that combine these objectives with decent work."