Examining the status of the country's labor market can help your company predict downturns in the economy before these phenomenon become too large to avoid. This in turn frees up resources for workers to use elsewhere. In the first production function in Figure athe output is GDP.
It also excludes farming, which accounts for only a relatively small share of the U. The late s and early s saw productivity rebound, but then productivity sagged a bit in the s.
For example, if the percentage of the population who holds jobs in an economy increases, GDP per capita will increase but the productivity of individual workers may not be affected. Labor productivity is largely driven by investment in capital, technological progress, and human capital development.