Productivity and Standard of Living

Prepared by: Rabin Bhandari

A typical family with all their possessions in the U.K., an advanced economy

Real GDP per capita: $36,600Life expectancy: 80.7 yearsAdult literacy: 99%

A typical family with all their possessions in Mexico, a middle income country

Real GDP per capita: $14,800Life expectancy: 76 yearsAdult literacy: 86%

A typical family with all their possessions in India

Real GDP per capita: $3830Life expectancy: 65.5 yearsAdult literacy: 74.04%

A typical family with all their possessions in Mali, a poor country

Real GDP per capita: $1,100Life expectancy: 53 yearsAdult literacy: 31%

Productivity• Productivity: Output/Input• Efficiency in industrial production.• Ratio of amount produced and the amount of any resources used.

Productivity1. Technology2. Capital deepening3. Educated and skilled workers4. Training5. Others: Loyalty to work,

motivation

Resources used1. Land2. Material3. Plant and machine tools4. Human Capital

Developing Countries• Low standard of living• Low productivity• Less human capital• Less physical capital• Traditional economies

(subsistence farming-not to trade)• Human Resources( less

skilled workers, education and literacy rates)

Developed countriesInternational Monitory fund(2010-2012)

What factors improve productivity?

Investments in physical capital, human capital (education, health and training) and technology all improve productivity and ultimately raise a nation’s standard of living.

Standard of Living• Meaning: Degree of material well being available to a person

or class or community which is necessary for sustaining and enjoying life.

• Requirements:

Standard of Living1. Food2. Clothing3. Shelter4. Security5. Essential Services

Productivity1. Technology2. Capital deepening3. Educated and skilled workers4. Training5. Others: Loyalty to work, motivation

Standard of Living• More and cheaper food by increasing the productivity of agriculture.• More and cheaper clothing and shelter by increasing the productivity of industry.• More security and essential services by increasing all productivity and earning power, leaving more from which to pay for them.

Production Vs Productivity?

Human Development Index

Source: http://lifestyle9.com/worlds-best-country-to-live-in-2013/

World’s Best Countries To LiveCountries with best quality of life1. Norway2. Australia3. USA4. Netherlands5. Germany6. New Zealand7. Ireland8. Sweden9. Switzerland10. Japan11.Canada12.South Korea13.Hong Kong

source: insidermonkey.com

Facts• China is still not a great place to be born.• Inequality plus poverty is much worse than just plain

poverty.• Poverty, violence and/or lack of freedom define the worst

countries to be born into.• The best countries to be born in are small, peaceful,

homogenous, liberal democracies.• Money can't buy you happiness, though it will get you 2/3 of

the way.

References Production and Operations Management, Chunawalla & Patel,

Himalaya Publishing House http://

www.jstor.org/discover/10.2307/2519196?uid=3738256&uid=2&uid=4&sid=21102728138713

• CSLS-Industry Canada Conference on Canada in the 21st Century: Richard G. Harris Simon Fraser University and CIAR• http://lifestyle9.com/worlds-best-country-to-live-in-2013

/• www.insidermonkey.com

Thank You