Table 3.6 gives data on indexes of output per hour (X) and real compen- sation per hour (Y ) for the business and nonfarm business sectors of the
U.S. economy for 1959-1997. The base year of the indexes is 1982 = 100 and the indexes are seasonally adjusted.
TABLE 3.6 PRODUCTIVITY AND RELATED DATA, BUSINESS SECTOR, 1959-98
[Index numbers, 1992 = 100; quarterly data seasonally adjusted]
Output per hour Compensation
of all persons1 per hour2
|
Year or quarter
|
Business sector
|
Nonfarm business sector
|
|
Business sector
|
Nonfarm business sector
|
|
1959 .........
|
50.5
|
54.2
|
|
13.1
|
13.7
|
|
1960 .........
|
51.4
|
54.8
|
|
13.7
|
14.3
|
|
1961 .........
|
53.2
|
56.6
|
|
14.2
|
14.8
|
|
1962 .........
|
55.7
|
59.2
|
|
14.8
|
15.4
|
|
1963 .........
|
57.9
|
61.2
|
|
15.4
|
15.9
|
|
1964 .........
|
60.6
|
63.8
|
|
16.2
|
16.7
|
|
1965 .........
|
62.7
|
65.8
|
|
16.8
|
17.2
|
|
1966 .........
|
65.2
|
68.0
|
|
17.9
|
18.2
|
|
1967 .........
|
66.6
|
69.2
|
|
18.9
|
19.3
|
|
1968 .........
|
68.9
|
71.6
|
|
20.5
|
20.8
|
|
1969 .........
|
69.2
|
71.7
|
|
21.9
|
22.2
|
|
1970 .........
|
70.6
|
72.7
|
|
23.6
|
23.8
|
|
1971 .........
|
73.6
|
75.7
|
|
25.1
|
25.4
|
|
1972 .........
|
76.0
|
78.3
|
|
26.7
|
27.0
|
|
1973 .........
|
78.4
|
80.7
|
|
29.0
|
29.2
|
|
1974 .........
|
77.1
|
79.4
|
|
31.8
|
32.1
|
|
1975 .........
|
79.8
|
81.6
|
|
35.1
|
35.3
|
|
1976 .........
|
82.5
|
84.5
|
|
38.2
|
38.4
|
|
1977 .........
|
84.0
|
85.8
|
|
41.2
|
41.5
|
|
1978 .........
|
84.9
|
87.0
|
|
44.9
|
45.2
|
|
1979 .........
|
84.5
|
86.3
|
|
49.2
|
49.5
|
|
1980 .........
|
84.2
|
86.0
|
|
54.5
|
54.8
|
|
1981 .........
|
85.8
|
87.0
|
|
59.6
|
60.2
|
|
1982 .........
|
85.3
|
88.3
|
|
64.1
|
64.6
|
|
1983 .........
|
88.0
|
89.9
|
|
66.8
|
67.3
|
|
1984 .........
|
90.2
|
91.4
|
|
69.7
|
70.2
|
|
1985 .........
|
91.7
|
92.3
|
|
73.1
|
73.4
|
|
1986 .........
|
94.1
|
94.7
|
|
76.8
|
77.2
|
|
1987 .........
|
94.0
|
94.5
|
|
79.8
|
80.1
|
|
1988 .........
|
94.7
|
95.3
|
|
83.6
|
83.7
|
|
1989 .........
|
95.5
|
95.8
|
|
85.9
|
86.0
|
|
1990 .........
|
96.1
|
96.3
|
|
90.8
|
90.7
|
|
1991 .........
|
96.7
|
97.0
|
|
95.1
|
95.1
|
|
1992 .........
|
100.0
|
100.0
|
|
100.0
|
100.0
|
|
1993 .........
|
100.1
|
100.1
|
|
102.5
|
102.2
|
|
1994 .........
|
100.7
|
100.6
|
|
104.4
|
104.2
|
|
1995 .........
|
101.0
|
101.2
|
|
106.8
|
106.7
|
|
1996 .........
|
103.7
|
103.7
|
|
110.7
|
110.4
|
|
1997 .........
|
105.4
|
105.1
|
|
114.9
|
114.5
|
1Output refers to real gross domestic product in the sector.
2Wages and salaries of employees plus employers' contributions for social insurance and private bene?t plans. Also includes an estimate of wages, salaries, and supplemental payments for the self-employed.
Source: Economic Report of the President, 1999, Table B-49, p. 384.
a. Plot Y against X for the two sectors separately.
b. What is the economic theory behind the relationship between the two variables? Does the scattergram support the theory?
c. Estimate the OLS regression of Y on X.