Is Zimbabwe More Productive Than the United States? Some Observations From PWT 8.1

In Penn World Table (PWT) 8.1, several developing countries stand out as outliers \nwith high total factor productivity (TFP) levels relative to the United States (U.S.). \nFor example, in 2011, Zimbabwe and Trinidad and Tobago are reported to have 3 and \n1.6 times higher TFP levels than the U.S., respectively. In addition, for several other \ncountries, such as Turkey and Gabon, the stated levels of TFP are very similar to \nthat of the U.S. level (1.01 and 1.11 times the U.S. levels, respectively). Estimates \nfor some of these countries seem rather unlikely when compared with other measures \nof productivity (such as output per worker). While in the construction of TFP levels \nPWT does use country-speci c factor shares we show that their results are very similar \nto calculating TFP levels with a Cobb-Douglas production function where capital and \nlabor shares are assumed to be the same across all countries, i.e., using a constant \nlabor share of 2/3 for all countries. A simple modi cation, using a constant labor \nshare of 2/3 for developed countries and 1/2 for developing countries, generates more \n\\plausible" estimates for TFP levels.