Comparative Productivity in British and German Manufacturing Before World War II: Reconciling Direct Benchmark Estimates and Time Series Projections

This article provides a new benchmark estimate of comparative Germany/U.K. labor productivity in manufacturing for circa 1907, and experiments with alternative German manufacturing production indices for time series projection from a circa 1935 benchmark. A consistent picture of broadly similar levels of manufacturing labor productivity in Britain and Germany throughout the period 1871–1938 is established. We also show that a substantial German productivity lead had already emerged in heavy industry by 1907, but was offset by a substantial British productivity lead in light industry. For the pre-1914 period, an additional check is provided using nominal income-based estimates.