Definition: Productivity adjustment

Purchasing power parities

An adjustment made to the prices paid by non-market producers for labour, capital and intermediate inputs so that they correspond to a common level of multi-factor productivity. In practice, an adjustment made to the prices (compensation of employees) paid by non-market producers for labour so that they represent the same level of labour productivity. Productivity adjustments are not made in Eurostat-OECD comparisons.
Source:
Eurostat, Organization for Economic Cooperation and Development (OECD), "Eurostat-OECD Methodological Manual on Purchasing Power Parities", Publications Office of the European Union, Luxembourg, 2012
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