Saturday, November 13, 2010

Productivity in the Oil Industry

MJ Perry has a remarkable figure showing how labor productivity changed during the recession. It's a nice example because output is measured in physical units -- barrels.

Before the recession, each employee produced about 800 barrels. After the recession, each produced about 1100 barrels.

Added: A problem with this example is that it is difficult to separate employees who help produce oil from those who invest in future oil production, which may be reacting to time pattern of oil prices rather than the forces that caused the recession (HT: James Donald).


James A. Donald said...

There is a big problem with this example: Oil companies do not hire people to produce oil today. They hire them to produce oil some years in the future.

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