ECONOMIC

other workers. Productivity is measured by output per labor-hour, andthese labor-hours do not reflect differences in training and experience. Earlyretirement has also reduced the proportion of experienced workers. Thuslower productivity growth is a natural consequence of a fall in the averagew r ork experience of those in the labor force. Changes in the age-sex compositionof the labor force can explain more than 0.1 percentage point (or about10 percent) of the productivity growth differential between 1948—66 and1966-73.Median educational attainment in the labor force has also increasedmore slowly in the past decade than it did in the previous 10 years. Inmany age and sex categories of workers there has been a slight slowdown inthe rate of increase in years of schooling. It is, however, unlikely that thissmall change had a significant effect on average productivity.Employment Shifts Between Sectors in the EconomyChanges in the industrial composition of employment have also been afactor in lowering average productivity growth. Before 1970 the shift ofworkers out of agriculture contributed to growth in productivity. Eventhough the rate of growth of productivity in agriculture was high, theaverage level of productivity was below the general average, and the movementof workers from agriculture to other sectors increased aggregateproductivity. Since the late 1960s this shift out of agriculture has slowed,and productivity growth from this source has been much reduced. Almostone-third of the difference between the trend rate of private productivitygrowth in 1948-66 and 1966-73 can be attributed to the higher rate ofreduction in agricultural employment in the earlier period.A higher rate of increase in the number of workers in the low-productivityservice sector has also been a factor in the slowdown in productivitygrowth. However, the effect of shifts in employment in the private nonfarmsector are much smaller than the effect of the movement of workers outof agriculture.To some extent shifts in employment between sectors and changes in theamount of capital per labor-hour measure the same thing and thus representdouble counting of changes in the capital-labor ratio. Low-productivitysectors may be less capital intensive, and therefore a shift in employmenttoward low-productivity sectors can be accompanied by a decrease in thegrowth of capital per worker. There are also independent effects, however,since capital per worker can change within each sector.Other Factors Affecting ProductivityProductivity growth that is not caused by increases in capital per laborhouror changes in the composition of the labor force is attributed to a catchallresidual category. Measurement errors of many kinds comprise part ofthe residual, but most of it is probably traceable to various forms of technicalprogress, such as improvements in the quality of capital and new techniquesfor combining inputs to increase production.47