Construction Productivity and Income Convergence

Saumik Paul () and Kunal Sen ()
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Saumik Paul: University of Manchester
Kunal Sen: UNU-WIDER

No 18377, IZA Discussion Papers from IZA Network @ LISER

Abstract: This paper examines the implications of heterogeneity in construction productivity on cross-country income disparity. Using a sample of 168 countries, we estimate the 10:1 spread in construction productivity as a factor of 49-fold in 2017. The construction productivity gap falls by 46 percent when production networks are incorporated in the development accounting framework. Based on counterfactual analysis, the elimination of cross-country disparity in construction productivity lowers the 10:1 spread in GDP per capita by 55 percent. Variations in both the intermediates share of construction output and complementarity in intermediate inputs across countries drive the aggregate effects of construction productivity shock.

Keywords: productivity; construction; intersectoral network; income disparity (search for similar items in EconPapers)
JEL-codes: E01 E13 L74 O11 O4 O5 (search for similar items in EconPapers)
Date: 2026-02
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