Is Egypt Really More Productive than the United States? The Data behind the Penn World Table

A new feature in recent versions of the Penn World Table (PWT) is data on comparative levels of total factor productivity (TFP) across countries. TFP is defined as the efficiency with which inputs are transformed into outputs, and differences across countries can be due to factors such as better tec...

Full description

Saved in:
Bibliographic Details
Published inInternational productivity monitor no. 41; pp. 115 - 134
Main Authors Inklaar, Robert, Woltjer, Pieter
Format Journal Article
LanguageEnglish
Published Centre for the Study of Living Standards 22.09.2021
Subjects
Egypt
Online AccessGet full text

Cover

More Information
Summary:A new feature in recent versions of the Penn World Table (PWT) is data on comparative levels of total factor productivity (TFP) across countries. TFP is defined as the efficiency with which inputs are transformed into outputs, and differences across countries can be due to factors such as better technology or better resource allocation. Yet, surprisingly, in PWT version 10.0, a number of low-income countries have a TFP level well above that of the United States. In this article we discuss the case of Egypt in 2017. PWT then reports a productivity level that is 23 per cent higher than that of the United States despite having an income level of only one fifth of the US level. We trace this anomalous outcome to the underlying data on comparative inputs. A fully satisfactory answer to the question in the title is elusive at this point, but the analysis highlights the data challenges that affect TFP level estimates, alongside more familiar modeling and measurement challenges.
ISSN:1492-9759
1492-9767