EPISODE #006 — Who Works Where?

In EPISODE #005, we mapped where people work and where value is produced. Now we ask what that structure implies.An economy is not productive simply because its workers are talented. It is productive because its workers are positioned. Productivity is not only an attribute of individuals — it is an outcome of structural allocation.

Takeaway

Structure becomes numerically visible when we compare employment shares with value-added shares.
If a sector produces more value than its employment share, it is, on average, relatively more productive.

1. The Structural Identity

Total output per person can be understood as a weighted sum:

GDP per capita = Σ (Employment Share × Productivity per Worker)

This identity is not abstract. It implies a concrete diagnostic:

If a sector’s value-added share exceeds its employment share, that sector is relatively more productive.
If a sector’s employment share exceeds its value-added share, that sector is relatively less productive.

2. Making Structure Numerically Visible

We now place the two maps side by side: where people work and where value is produced.

Sectoral employment data extend to more recent years, but sectoral value-added data currently extend to 2021 for complete G7 coverage. Therefore, 2021 is used as the latest common year for both series.

2.1 Employment Share vs Value-Added Share (2021)

This table builds directly on the sectoral structure shown in EPISODE #005. It is reproduced here so that this episode can be read independently.

Country	Year	Emp: Agr (%)	VA: Agr (%)	Emp: Ind (%)	VA: Ind (%)	Emp: Svc (%)	VA: Svc (%)
Canada	2021	1.36	1.60	19.34	25.33	79.30	66.39
Germany	2021	1.21	0.75	27.38	25.16	71.41	63.55
France	2021	2.51	1.46	19.51	16.09	77.97	70.67
United Kingdom	2021	0.90	0.70	16.92	16.96	82.18	72.17
Italy	2021	4.05	1.83	26.64	22.56	69.31	64.84
Japan	2021	3.17	1.01	23.70	29.22	73.14	69.02
United States	2021	1.66	0.96	19.18	17.88	79.15	77.60

Table 1. Employment share and value-added share by sector, G7 economies, 2021.
This table reproduces the sectoral structure shown in EPISODE #005 so that the present episode can be read independently.

How to read this table:

If value-added share > employment share → the sector is relatively higher-productivity.
If value-added share < employment share → the sector is relatively lower-productivity.

2.2 Implied Relative Productivity by Sector (2021)

We can convert the gap into a simple index called Relative Productivity:

Relative Productivity = Value-Added Share ÷ Employment Share

Interpretation: 1.00 = economy average; 1.20 = 20% above average; 0.80 = 20% below average.

Country	Year	RP Index: Agr	RP Index: Ind	RP Index: Svc
Canada	2021	1.171	1.310	0.837
Germany	2021	0.622	0.919	0.890
France	2021	0.582	0.824	0.906
United Kingdom	2021	0.779	1.002	0.878
Italy	2021	0.453	0.847	0.935
Japan	2021	0.319	1.233	0.944
United States	2021	0.577	0.932	0.980

Table 2. Implied relative productivity by sector, G7 economies, 2021.
Relative productivity is computed as value-added share divided by employment share.

Notes:

Relative productivity is a ratio of shares, not an absolute productivity measure. It reveals the relative positioning of labor across sectors.
If a sector has a very small employment share, the ratio can become more volatile. Small-share sectors should therefore be interpreted with care.
In World Bank classification, “agriculture” refers to agriculture, forestry, and fishing, not crop farming alone.

2.3 Notable Structural Extremes (2021)

While most relative productivities cluster around 0.8–1.0, a few sectors stand out clearly:

Canada — Industry (1.310) and Japan — Industry (1.233) show significantly above-average productivity relative to their employment weight.
Japan — Agriculture (0.319) and Italy — Agriculture (0.453) indicate substantial underperformance relative to labor allocation.

These are not marginal deviations. They reflect structural positioning — how labor is distributed across sectors that differ greatly in productivity intensity.

Takeaway

Productivity differences become visible when structure is expressed numerically.
Relative productivity shows how strongly labor is positioned toward sectors that generate more or less value than their employment weight would suggest.

3. The Structural Question

We can now ask a more precise version of the productivity question:

Unresolved Question:
→ If two countries utilize labor similarly, how much of their productivity gap is explained by sectoral allocation (employment shares) and sectoral advantage (relative productivity)?

Next:
EPISODE #007 — Where Does Productivity Actually Come From?

All tables and figures on this site are generated from publicly available macroeconomic datasets.