Total Labour Requirements and Value Added Productivity of Labour in the Process of Economic Development

When the inverse of the value added productivity of labour is regressed on total labour requirements (which is equivalent to labour values), a significant relationship is obtained. This indicates that the value added productivity of labour can be explained by total labour requirements (labour values). The mean value of the regression coefficients is about 1.7. The regression coefficients have a tendency to increase during the process of rapid economic development and to decrease afterwards. Such movements are explained by value added linkages. This study is based on input-output analysis, where total labour requirements per monetary unit of output and the value added productivity of labour are calculated for each of 24 industries in Japan, Korea and USA, every 5 years between 1960 to 1985.