Indicator 8.2.1 Annual growth rate of real GDP per employed person

Indicator 8.2.1: Annual growth rate of real GDP per employed person

Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high value added and labour-intensive sectors

International Labour Organization (ILO)

Definition:

The annual growth rate of real Gross Domestic Product (GDP) per employed person conveys the annual percentage change in real GDP per employed person.

Concepts:

GDP: It is the main measure of national output, representing the total value of all final goods and services within the System of National Accounts (SNA) production boundary produced in a particular economy (that is, the dollar value of all goods and services within the SNA production boundary produced within a country’s borders in a given year). According to the SNA, “GDP is the sum of gross value added of all resident producer units plus that part (possibly the total) of taxes on products, less subsidies on products, that is not included in the valuation of output … GDP is also equal to the sum of the final uses of goods and services (all uses except intermediate consumption) measured at purchasers’ prices, less the value of imports of goods and services GDP is also equal to the sum of primary incomes distributed by resident producer units.”

Real GDP: Real GDP refers to GDP calculated at constant prices, that is, the volume level of GDP, excluding the effect of inflation and favouring comparisons of quantities beyond price changes. Constant price estimates of GDP are calculated by expressing values in terms of a base period. In theory, the price and quantity components of a value are identified and the price in the base period is substituted for that in the current period.

Employment: All persons of working age who, during a short reference period (one week), were engaged in any activity to produce goods or provide services for pay or profit.

Percent (%)

Description:

Output measures used in the numerator of this indicator Gross Domestic Product (GDP) are best obtained from the production side of national accounts and represent, as much as possible, GDP at market prices for the aggregate economy (adjusted for inflation, in constant prices).

Employment data used in the denominator are preferably derived from labour force or other household surveys with an employment module. In the absence of a household survey, establishment surveys, administrative records or official estimates based on reliable sources can be used as well as population censuses. It is however important to note that employment data from establishment surveys will capture the number of jobs and not the number of persons employed as preferred for the denominator. Also, establishment surveys cover, in many cases, the formal sector and employers and employees only, not accounting for the whole economy.

When calculating this indicator, it is important to ensure that the coverage of the employment data is consistent with that of the national accounts.

Input GDP and employment data are provided by national statistical offices, and in some cases labour ministries or other related agencies.

Output measures are obtained from national accounts and represent, as much as possible, GDP at market prices for the aggregate economy. However, despite common principles that are mostly based on the United Nations SNA, there are still significant problems in international consistency of national accounts estimates, based on factors such as differences in the treatment of output in services sectors, differences in methods used to correct output measures for price changes (in particular, the use of different weighting systems to obtain deflators) and differences in the degree of coverage of informal economic activities.

Data on employment used in the denominator of this indicator refer, as much as possible, to the average number of persons with one or more paid jobs during the year. Employment data are based on the statistical standards from the 13th International Conference of Labour Statisticians (ICLS).

$\mathrm{R}\mathrm{e}\mathrm{a}\mathrm{l}\mathrm{\ }\mathrm{G}\mathrm{D}\mathrm{P}\mathrm{\ }\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{\ }\mathrm{e}\mathrm{m}\mathrm{p}\mathrm{l}\mathrm{o}\mathrm{y}\mathrm{e}\mathrm{d}\mathrm{\ }\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{s}\mathrm{o}\mathrm{n}=\mathrm{\ }\frac{\mathrm{G}\mathrm{D}\mathrm{P}\mathrm{\ }\mathrm{a}\mathrm{t}\mathrm{\ }\mathrm{c}\mathrm{o}\mathrm{n}\mathrm{s}\mathrm{t}\mathrm{a}\mathrm{n}\mathrm{t}\mathrm{\ }\mathrm{p}\mathrm{r}\mathrm{i}\mathrm{c}\mathrm{e}\mathrm{s}\mathrm{\ }}{\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{\ }\mathrm{e}\mathrm{m}\mathrm{p}\mathrm{l}\mathrm{o}\mathrm{y}\mathrm{m}\mathrm{e}\mathrm{n}\mathrm{t}}$

The numerator and denominator of the equation above should refer to the same reference period, for example, the same calendar year.

If we call the real GDP per employed person “LabProd”, then the annual growth rate of real GDP per employed person is calculated as follows:

$\mathrm{A}\mathrm{n}\mathrm{n}\mathrm{u}\mathrm{a}\mathrm{l}\mathrm{\ }\mathrm{g}\mathrm{r}\mathrm{o}\mathrm{w}\mathrm{t}\mathrm{h}\mathrm{\ }\mathrm{r}\mathrm{a}\mathrm{t}\mathrm{e}\mathrm{\ }\mathrm{o}\mathrm{f}\mathrm{\ }\mathrm{r}\mathrm{e}\mathrm{a}\mathrm{l}\mathrm{\ }\mathrm{G}\mathrm{D}\mathrm{P}\mathrm{\ }\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{\ }\mathrm{e}\mathrm{m}\mathrm{p}\mathrm{l}\mathrm{o}\mathrm{y}\mathrm{e}\mathrm{d}\mathrm{\ }\mathrm{p}\mathrm{e}\mathrm{r}\mathrm{s}\mathrm{o}\mathrm{n}=\mathrm{\ }\frac{\left(\mathrm{L}\mathrm{a}\mathrm{b}\mathrm{P}\mathrm{r}\mathrm{o}\mathrm{d}\mathrm{\ }\mathrm{i}\mathrm{n}\mathrm{\ }\mathrm{y}\mathrm{e}\mathrm{a}\mathrm{r}\mathrm{\ }\mathrm{n}\right)\mathrm{\ }–\left(\mathrm{L}\mathrm{a}\mathrm{b}\mathrm{P}\mathrm{r}\mathrm{o}\mathrm{d}\mathrm{\ }\mathrm{i}\mathrm{n}\mathrm{\ }\mathrm{y}\mathrm{e}\mathrm{a}\mathrm{r}\mathrm{\ }\mathrm{n}-1\right)}{(\mathrm{L}\mathrm{a}\mathrm{b}\mathrm{P}\mathrm{r}\mathrm{o}\mathrm{d}\mathrm{\ }\mathrm{i}\mathrm{n}\mathrm{\ }\mathrm{y}\mathrm{e}\mathrm{a}\mathrm{r}\mathrm{\ }\mathrm{n}-1)}\mathrm{\ }\times 100$

2024-08-02

International Labour Organization (ILO)

1.1.1, 8.3.1, 8.5.2, 10.4.1