October 10, 2007

Productivity and hours worked

Matthew Yglesias responds to John McCain's claim that American workers are the most productive in the world by claiming that, per hour, they aren't. Now I hate to be defending John McCain, but this just isn't right.Yglesias claims:

It's true that American workers produce the most, but that's because we work longer hours. By contrast, "measured as value added per hour worked, American workers dropped behind those in Norway where workers produced $37.99 per hour, compared to $35.63 in the United States and $35.08 in France."
But this is ridiculous.Productivity is clearly a function of time spent, and intuitively it is likely to be increasing and concave. So the first couple of hours I spend working are the most productive, but after that, my rate of productivity will slow down. This will skew my "average" productivity, but it hardly means that our productivity function is less than all those European countries where people only work 20 hours a week and take 3 months off a year for vacation.