Indexing Structural Distortion: Sectoral Productivity, Structural Change and Growth

Sakai Ando and Koffie Ben Nassar

No 2017/205, IMF Working Papers from International Monetary Fund

Abstract: This paper proposes a new index of sectoral labor distortion using employment and valueadded shares. We show that this index is highly correlated with growth both crosssectionally and over time. We also use it to compare the degree of distortion among countries and identify sectors where the potential payoffs in terms of growth from reforms could be large. The regression analysis in the paper shows that education and various structural reforms have potential to improve the efficiency of sectoral labor allocation.

Keywords: WP; regression analysis; sectoral distortion; growth; index; productivity; structural change; resource misallocation; productivity sector; productivity equalization; sectoral productivity; productivity line; policy variable; Agricultural sector; Total factor productivity; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 48
Date: 2017-09-19
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Citations: View citations in EconPapers (9)

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