【Aging, safety net and fiscal crisis in Japan】No.30: Labor productivity in the medical, long-term, and welfare care industry

The Japan Productivity Center issued the "International Comparison of Labor Productivity, 2017 Edition" in December 2017. Labor productivity is generally calculated using accomplishment per employee, or accomplishment per hour of work. For an international comparison, we calculate productivity based on added value (equivalent to the gross domestic product [GDP] at national level). According to the report, Japan's hourly labor productivity in 2016 was $ 46.0, which is rated 20th in the 35 belonging to the Organization for Economic Co-operation and Development (OECD). The per capita labor productivity in a year was $ 81,777, which is rated as 21st among the OECD countries.

Close examination of the report reveals that the labor productivity of the manufacturing industry is rising, whereas the labor productivity of the service industry - notably the medical, long-term, and welfare care industry - has not increased. As illustrated in Table 1, Japan's labor productivity growth rate in the six years between 2010 and 2015 is as high as 2% in the manufacturing industry, but in the education and welfare service industry, it is -1%, which is significantly less than other countries. This is largely due to the growth rate of the labor productivity of the medical, long-term, and welfare care industry showing negative growth (Figure 1).