THE CYCLICAL AND SECULAR BEHAVIOR OF THE LABOR INPUT - COMPARING EFFICIENCY UNITS AND HOURS WORKED

A monthly labour input series designed to correct for the fact that all hours worked are not of the same quality is constructed and its properties compared with unadjusted hours worked. This efficiency units series is constructed from BLS data on hours worked and earnings by age and sex. The cyclical fluctuations displayed by the efficiency units series are smaller on average than those displayed by hours worked, although the difference is not large. However, the secular behaviour of the series is quite different: hours worked per capita displays a significant positive trend while efficiency units per capita does not.