Multifactor Productivity of Labor

Multifactor Productivity of Labor measures how efficiently labor and other inputs, like capital and materials, are combined to produce goods and services. While labor productivity focuses solely on the output produced per hour worked, multifactor productivity considers the impact of all resources involved. It helps assess overall efficiency in production by evaluating how well a business utilizes its workforce along with technology, equipment, and other factors to generate output. Essentially, it provides a broader view of productivity, highlighting how effectively a company turns various resources into results.