Labour Productivity Growth in the Industrial Sector of Indonesia: Structural Bonus or Structural Burden?

Lilis Siti Badriah (), Armida S. Alisjahbana (), Kodrat Wibowo () and Ferry Hadiyanto ()
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Lilis Siti Badriah: Department of Economics, Faculty of Economics and Business, Jenderal Soedirman University
Armida S. Alisjahbana: Department of Economics, Faculty of Economics and Business, Padjadjaran University
Kodrat Wibowo: Department of Economics, Faculty of Economics and Business, Padjadjaran University
Ferry Hadiyanto: Department of Economics, Faculty of Economics and Business, Padjadjaran University

Malaysian Journal of Economic Studies, 2019, vol. 56, issue 1, 139-159

Abstract: The economic structural change on the output side is accompanied by the reallocation of labour from the agricultural sector to the industrial sector. Some studies show the different effects of labour reallocation on labour productivity growth. This study analyses labour productivity growth in the manufacturing sector in relation to economic structural changes in Indonesia. The analytical methods used are shiftshare and panel data regression models using secondary data of 30 provinces from 2003-2014. The results show economic structural change through labour reallocation decreases growth of labour productivity (structural burden) although productivity continues to grow.

Keywords: Input reallocation; labour productivity growth; structural bonus; structural burden; structural change (search for similar items in EconPapers)
JEL-codes: L60 O14 O40 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:mjr:journl:v:56:y:2019:i:1:p:139-159

DOI: 10.22452/MJES.vol56no1.7

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