Sectoral decomposition of convergence in labor productivity: a re-examination from a new dataset

Alistair Dieppe () and Hideaki Matsuoka
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Alistair Dieppe: European Central Bank

Empirical Economics, 2025, vol. 68, issue 4, No 10, 1829-1859

Abstract: Abstract This paper investigates how the sector-specific source or the changing sectoral composition of labor productivity has contributed to $$\beta $$ β -convergence, using a newly constructed eight-sector database. Compared with the literature decomposing convergence, it employs a large and diverse sample of countries. The main findings are twofold. First, both sector-specific and sectoral reallocation have become important drivers of $$\beta $$ β -convergence in labor productivity. Second, looking across the sectors, agricultural productivity growth has been a significant contributor to $$\beta $$ β -convergence, whereas most other sectors have not contributed to overall convergence. Our result is in line with the literature that illustrates that the increase in agricultural productivity has a larger poverty-reduction effect than increases in other sectors.

Keywords: Labor productivity; Shift-share decomposition; $$\beta $$ β -decomposition; New sectoral database (search for similar items in EconPapers)
JEL-codes: O11 O47 O57 (search for similar items in EconPapers)
Date: 2025
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Working Paper: Sectoral decomposition of convergence in labor productivity: A re-examination from a new dataset (2022)
Working Paper: Sectoral Decomposition of Convergence in Labor Productivity: A Re-examination from a New Dataset (2021)
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DOI: 10.1007/s00181-024-02692-y

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