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PPPs for policy making: a visual guide to using data from the ICP - Chapter 3: Trade and competitiveness

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Productivity

PPP-based GDP per employed person, or value added per employee, represents a measure of labor productivity and provides information on the evolution, efficiency, and quality of human capital in the production process (map 3.4). However, cross-country comparisons of labor productivity levels can also reflect differences in underlying capital stock. Economic growth in a country can be ascribed to many factors, including increased employment and more productive work by those who are employed. Labor productivity and growth estimates can support the formulation of labor market policies and monitor their impact and success. They can also contribute to an understanding of how labor market performance affects living standards. The Organisation for Economic Co-operation and Development (OECD) also provides these data by firm size (figure 3.2).