An Analysis of Labor and Multifactor Productivity in Air Transportation: 1990 – 2001
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An Analysis of Labor and Multifactor Productivity in Air Transportation: 1990 – 2001

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    The analysis has two main objectives: 1) to examine labor productivity and multifactor productivity (MFP) in U.S. air transportation during the 1990 to 2001 period and to compare these measures to those of two other transportation subsectors and of the U.S. business sector; and 2) to assess the factors that have affected changes of labor productivity and MFP in air transportation over time. The assessment finds that labor productivity and multifactor productivity in air transportation both increased over the analysis period. However, both measures grew at lower rates during the second half of the 1990s. Factors affecting increases in labor productivity include increases in capital intensity and technological advances. Factors affecting multifactor productivity include improvements in the capital input, measures that increase the utilization of air carrier resources, measures that speed up maintenance work and the marketing of air services, and changes in industry structure through mergers, acquisitions, and bankruptcies.
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