The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. Detailed information on the use of cookies on this site is provided in our cookie policy. For more information on how The Conference Board collects and uses personal data, please visit our privacy policy. By continuing to use this Site or by clicking "OK", you consent to the use of cookies. 
International Comparisons of Manufacturing Unit Labor Costs: Sources, Trends, and New Directions

Unit labor cost (ULC), defined as labor compensation per unit of output, is a widely used measure of international cost competitiveness. ULC trends, however, differ widely across countries and, traditionally, have been explained in terms of underlying movements in productivity, compensation, and exchange rates. This paper attempts to investigate three issues.

First, it examines the availability of ULC, productivity, and compensation data used for assessing international competitiveness. Three major data sources are reviewed: The Conference Board International Labor Comparisons (ILC) program, the OECD Structural Analysis Database (STAN), and the EU KLEMS Growth and Productivity Accounts. For each source, the paper derives and compares measures of manufacturing ULCs for overlapping countries.

Second, using the ILC database, the paper presents ULC trends and levels for detailed manufacturing industries to shed light on variations in industry cost competitiveness. And third, the paper makes a first attempt to adjust unit labor cost measures for product quality differences in export baskets between countries, using unit values of exported products. The exercise reveals that the adjusted unit labor cost in many high-income countries are lower than the original measures, thus suggesting a stronger competitiveness for these countries in the international market as they produce higher quality products vis-à-vis low-income countries.

This working paper is complimentary.


OTHER RELATED CONTENT

RESEARCH & INSIGHTS

US Labor Shortages: Challenges and Solutions

US Labor Shortages: Challenges and Solutions

January 27, 2020 | Executive Summary

US Labor Shortages: Challenges and Solutions

US Labor Shortages: Challenges and Solutions

January 27, 2020 | Research Report

Proxy Voting Analytics (2016-2019)

Proxy Voting Analytics (2016-2019)

December 19, 2019 | Research Report

WEBCASTS

CONFERENCES & EVENTS

Performance Management Conference

Performance Management Conference

December 08 - 09, 2020 | (New York, NY)

The 2020 Executive Compensation Conference

The 2020 Executive Compensation Conference

October 22 - 23, 2020 | (New York, NY)

COUNCILS

BLOGS

PRESS RELEASES & IN THE NEWS