<p>It could be that Turkey has</p>
<ol>
<li>a lower capital stock, and/or</li>
<li>a lower ratio of fixed capital formation to GDP</li>
</ol>
<p>than Italy or Romania.</p>

CC BY-SA 4.0
2024-05-16T06:03:17.300Z
Why is this not reflected in labor productivity, which measures total output (created with labor and capital) devided by worked hours?
Giskard
CC BY-SA 4.0
2024-05-15T19:18:05.740Z
2024-05-15T19:18:38.703Z
2024-05-15T19:18:38.703Z
Emilio Lincopi
<p>When computing labour productivity, the OECD divides GDP by a labour input, where &quot;Labour input is defined as total hours worked of all persons engaged in production&quot;. Only the workforce is taken into account.</p>
<p>When computing GDP per capita, the total population is taken into account.</p>
<p>For this reason, countries with higher unemployment, lower participation rate (especially for women), with an older population, or a larger shadow economy have - ceteris paribus, ie. for a same level of labour productivity- on average a lower GDP/capita.</p>

CC BY-SA 4.0
2024-10-15T20:37:02.900Z
2024-10-15T20:37:02.900Z
Bertrand
<p><strong>I avoided using nominal GDP per Capita because of Lira devaluation.</strong></p>
<h2>Here is the labour productivity of Turkey, Portugal, Romania and some other countries (2022)</h2>
<p><a href="https://data.oecd.org/lprdty/gdp-per-hour-worked.htm" rel="nofollow noreferrer">https://data.oecd.org/lprdty/gdp-per-hour-worked.htm</a>
Expressed in 2010 Constant US Dollars</p>
<p>Turkey - $52.52</p>
<p>Portugal - $43.10</p>
<p>Slovenia - $46.51</p>
<p>Romania - $35.89</p>
<p>Mexico - $19.28</p>
<p>Spain - $53.10</p>
<p>Italy - $54.2</p>
<h2>Now you look at GDP per Capita in PPP (2022)</h2>
<p><a href="https://www.imf.org/external/datamapper/PPPPC@WEO/TUR/SVN/ROU/PRT/MEX/ESP/ITA" rel="nofollow noreferrer">https://www.imf.org/external/datamapper/PPPPC@WEO/TUR/SVN/ROU/PRT/MEX/ESP/ITA</a></p>
<p>Turkey - $39,280</p>
<p>Portugal - $42,700</p>
<p>Slovenia - $48,710</p>
<p>Romania - $43,180</p>
<p>Mexico - $23,560</p>
<p>Spain - $47,670</p>
<p>Italy - $52,560</p>
<hr />
<p>Mexico is what I expected it to be, it is almost half the productivity of the other countries and has almost half the GDP per Capita PPP.</p>
<p>Turkey on the other hand has labour productivity similar to Spain and Italy and is yet nowhere near their GDP per Capita PPP.
Romanian productivity is at $35/hour yet manages to have a higher GDP per Capita PPP than Turkey with 52/hour.</p>
<hr />
<p>Can someone explain this?
I just measured labour productivity for 2023, from labour productivity growth stats. Turkey is going to surpass Italy and Spain when it comes to labour productivity. So why is Turkey much poorer than Spain and Italy?</p>
<p><a href="https://www.ceicdata.com/en/indicator/turkey/labour-productivity-growth#:%7E:text=What%20was%20Turkey%27s%20Labour%20Productivity,table%20below%20for%20more%20data" rel="nofollow noreferrer">https://www.ceicdata.com/en/indicator/turkey/labour-productivity-growth#:~:text=What%20was%20Turkey's%20Labour%20Productivity,table%20below%20for%20more%20data</a>.</p>

CC BY-SA 4.0
2024-05-15T14:02:44.547Z
Romania exhibits the same behavior.
Giskard
CC BY-SA 4.0
2024-05-15T15:06:39.890Z
Yes, I don't understand why there is such a massive gap between labour productivity and income levels. Turkey's Gini Index is similar to Mexico and the USA, it's not as bad as South Africa or Russia. So I'm left guessing..
David
CC BY-SA 4.0
2024-05-15T15:13:33.457Z
this could be explained by different dependency ratios did you looked at that? I am guessing female labor force participation in Turkey is also probably lower so that’s another possible explanation
1muflon1
CC BY-SA 4.0
2024-05-15T15:33:48.853Z
Yeah, you could be right.
https://data.worldbank.org/indicator/SL.TLF.TOTL.FE.ZS?locations=TR-RO-PT
David
CC BY-SA 4.0
2024-05-15T15:44:12.510Z
I think it is also because of a high unemployment rate. Labor productivity can be the same, but since there are a lot of non-working persons, the slice is smaller for everyone. (As the data show: https://data.worldbank.org/indicator/SL.UEM.TOTL.NE.ZS?end=2022&locations=TR-RO-PT-IT&start=2022&view=bar)
teddi
<gdp><productivity><purchasing-power-partity>
How does Turkey have higher labour productivity than Portugal and Romania but lower GDP per capita PPP?
David
# How does Turkey have higher labour productivity than Portugal and Romania but lower GDP per capita PPP?

(Asked by: username_0 on 2024-05-15)

**I avoided using nominal GDP per Capita because of Lira devaluation.**

## Here is the labour productivity of Turkey, Portugal, Romania and some other countries (2022)

<https://data.oecd.org/lprdty/gdp-per-hour-worked.htm>
Expressed in 2010 Constant US Dollars

Turkey - $52.52

Portugal - $43.10

Slovenia - $46.51

Romania - $35.89

Mexico - $19.28

Spain - $53.10

Italy - $54.2

## Now you look at GDP per Capita in PPP (2022)

<https://www.imf.org/external/datamapper/PPPPC@WEO/TUR/SVN/ROU/PRT/MEX/ESP/ITA>

Turkey - $39,280

Portugal - $42,700

Slovenia - $48,710

Romania - $43,180

Mexico - $23,560

Spain - $47,670

Italy - $52,560

---

Mexico is what I expected it to be, it is almost half the productivity of the other countries and has almost half the GDP per Capita PPP.

Turkey on the other hand has labour productivity similar to Spain and Italy and is yet nowhere near their GDP per Capita PPP.
Romanian productivity is at $35/hour yet manages to have a higher GDP per Capita PPP than Turkey with 52/hour.

---

Can someone explain this?
I just measured labour productivity for 2023, from labour productivity growth stats. Turkey is going to surpass Italy and Spain when it comes to labour productivity. So why is Turkey much poorer than Spain and Italy?

[https://www.ceicdata.com/en/indicator/turkey/labour-productivity-growth#:~:text=What%20was%20Turkey's%20Labour%20Productivity,table%20below%20for%20more%20data](https://www.ceicdata.com/en/indicator/turkey/labour-productivity-growth#:%7E:text=What%20was%20Turkey%27s%20Labour%20Productivity,table%20below%20for%20more%20data).

**Tags:** gdp, productivity, purchasing-power-partity

> **Comments:**
> **username_1**: Romania exhibits the same behavior.  
> **username_0**: Yes, I don't understand why there is such a massive gap between labour productivity and income levels. Turkey's Gini Index is similar to Mexico and the USA, it's not as bad as South Africa or Russia. So I'm left guessing..  
> **username_2**: this could be explained by different dependency ratios did you looked at that? I am guessing female labor force participation in Turkey is also probably lower so that’s another possible explanation  
> **username_0**: Yeah, you could be right. https://data.worldbank.org/indicator/SL.TLF.TOTL.FE.ZS?locations=TR-RO-PT  
> **username_3**: I think it is also because of a high unemployment rate. Labor productivity can be the same, but since there are a lot of non-working persons, the slice is smaller for everyone. (As the data show: https://data.worldbank.org/indicator/SL.UEM.TOTL.NE.ZS?end=2022&locations=TR-RO-PT-IT&start=2022&view=bar)  

---

## 2 answers

### Answer by username_4 on 2024-05-15. Score: 1

It could be that Turkey has

1. a lower capital stock, and/or
2. a lower ratio of fixed capital formation to GDP

than Italy or Romania.

> **Comments:**
> **username_1**: Why is this not reflected in labor productivity, which measures total output (created with labor and capital) devided by worked hours?  

---

### Answer by username_5 on 2024-10-15. Score: 0

When computing labour productivity, the OECD divides GDP by a labour input, where "Labour input is defined as total hours worked of all persons engaged in production". Only the workforce is taken into account.

When computing GDP per capita, the total population is taken into account.

For this reason, countries with higher unemployment, lower participation rate (especially for women), with an older population, or a larger shadow economy have - ceteris paribus, ie. for a same level of labour productivity- on average a lower GDP/capita.


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