Productivity refers to the ability to create goods and services by using available resources, including labor, equipment, and land and other natural resources. Economists frequently measure the productivity of a nation’s economy. Their findings often are expressed as the amount of goods and services an average worker can produce over a given period.
A rise in productivity may result from better production methods, more equipment, and higher levels of education among workers. Over long periods, productivity growth can bring dramatic increases in a country’s standard of living. For example, before the 1600’s, it took as much as 90 percent of a country’s workers to produce food for everyone. Today, only about 3 percent of all workers in industrialized countries work in agriculture. As a result, a large percentage of the population has become available to produce a great variety of goods and services. Increased productivity can also reduce the cost of creating goods and services and so lower the prices consumers must pay for them.
