Common and idiosyncratic shocks to labor productivity across sectors and countries: Is climate relevant?

Luciano Gutierrez ()

Macroeconomics from EconWPA

Abstract: We use two methodologies, the least square dummy variables approach and the dynamic factor models, to decompose the labor productivity growth rate for a large sample of countries into common, i.e. global, and idiosyncratic, i.e. country, components. We find that country specific effects are much more important than common effects in explaining labor productivity. The interesting result is that, when splitting the sample of countries into those located in temperate zones and those located in tropical zones, we find that the common component plays a larger role in temperate countries. Thus, given the wide gap in labor productivity between the two climatic zones, policy should be targeted on developing technologies for tropical zones and/or on helping them to absorb R&D targeted for temperate countries

Keywords: Labor productivity; Decomposition; Dynamic factors; Panel unit roots. (search for similar items in EconPapers)
JEL-codes: C23 O47 O57 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-lab
Date: Written 2003-11-14
Note: Type of Document - pdf; prepared on winme; to print on hp;
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