Question

A study conducted by the Moscow-based management consulting firm Strategy Partners found that the average labor productivity in Russia is only 17 percent of labor productivity in the United States. What factors would cause U.S. labor productivity to be nearly six times higher than Russian labor productivity?

Answer 1

Labour productivity measures output per worker.

Factors which may cause higher productivity in the US labour force-

1.Enhanced Education and Skills of the worker though training

2. Presence of Labour augmenting technology in US- echnology which helps attaining more output per worker per hour

3. More favourable Climate to work in US

4. Substitution of capital in US for labour- With lesser labour along with more capital, the output per unit labour will be more in US

5. Easier labour laws in the US which make firing of inefficient workers simpler.

Thank you....