Total factor productivity - Wikipedia, the free encyclopedia

Total factor productivity - Wikipedia, the free encyclopedia: "Growth accounting exercises and Total Factor Productivity are open to the Cambridge Critique. Therefore, some economists believe that the method and its results are invalid.
As a residual, TFP is also dependent on estimates of the other components. A 2005 study[1] on human capital attempted to correct for weaknesses in estimations of the labour component of the equation, by refining estimates of the quality of labour. Specifically, years of schooling is often taken as a proxy for the quality of labour (and stock of human capital), which does not account for differences in schooling between countries. Using these re-estimations, the contribution of TFP was substantially lower."