Measuring labor productivity dynamics in U.S. industrial and electric power sectors: a case study (2014–2023)

This study proposes a subsystem methodology for measuring labor productivity in the U.S. industrial and electric power sectors by leveraging public data available between 2014 and 2023. Building on Pasinetti’s framework and subsequent developments, the approach employs Vertically Integrated Sectors (VIS) to account for both direct and indirect productivity effects. The novelty of this work is twofold. First, it enables the estimation of productivity trends over time, providing a robust foundation for empirical analysis. Second, it applies the methodology to a case study of the electric generation sector, highlighting its practical relevance. Using data from the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Impact Analysis for Planning (IMPLAN) tool, the study reveals significant discrepancies between conventional productivity measures and those derived from the VIS approach. Furthermore, the proposed method aligns with the principles of Integrated Energy Systems by capturing the interrelations among generation, distribution, storage, and consumption. This alignment underscores its utility and applications for energy-related policy and planning. Overall, the findings contribute to more precise labor productivity assessments, supporting informed decision-making and future research. Additionally, the method highlights the importance of considering the whole supply chain, providing interrelated metrics for labor productivity which includes both, direct and indirect effects on the final labor productivity metric. By incorporating intersectoral dependencies, this method offers a more comprehensive and accurate measure of labor productivity compared to traditional metrics.