Has Switzerland really been marked by low productivity growth? Hours worked and labor productivity in Switzerland in a long-run perspective

Abstract

This paper shows that previous work has understated Switzerland's performance in terms of labor productivity growth. First, available data on hours worked are incoherent and overestimate growth in hours worked. The paper therefore establishes a consistent series of total hours worked and its components covering 1950-2010, showing that Swiss labor inputs actually were stable from 1964 to 2007. Second, long-term improvements in Switzerland's Terms of Trade indicate that quality improvements in Swiss exports might not be fully mirrored in growth of GDP and, hence, productivity growth.