Firm Productivity and Employment in Paraguay 2010 - 2014

Elizabeth Ruppert Bulmer and Adrian Scutaru

No 30444920, Jobs Group Papers, Notes, and Guides from The World Bank

Abstract: Paraguay has achieved positive employment outcomes over the last decade, reflecting more jobs and improved average job quality, which together contributed to significant poverty reduction. Firms played a major role in creating these jobs, especially formal jobs. It is important to understand how firm performance has translated into employment, the nature of the resulting jobs, and the factors affecting these outcomes. Using firm-level datasets, this analysis explores the characteristics of firms that are growing or stagnating; the sectors into which new firms are entering or incumbent firms are expanding their operations; and the factors that may be helping or hindering firms to enter, expand, or increase their productivity. High rates of informality and evasion create a challenging private sector environment for firms, but even among formal firms, the prevailing structure is characterized by micro-firms that lack scale economies, are concentrated in non-tradables, have generally low productivity levels, and rely on unskilled employment. The analysis also finds a pervasive duality between micro-sized low-productivity firms on one end, and a small number of highly productive firms in concentrated markets on the other end. These results imply some important challenges for the continued development of a healthy, dynamic and inclusive private sector.

Keywords: degree of market concentration; protection of minority investor; female employment; total factor productivity; highly skilled worker; unpaid family worker; social insurance coverage; financial service sector; share of employment; labor productivity growth; labor market performance; household survey data; degree of informality; data collection effort; cost of production; output per worker; positive social externalities; labor force entrant; quality of outputs; supply of labor; competition policy framework; information and communication; factor of production; gender earnings gap; female work force; gender wage gap; labor force growth; proportion of female; export processing zone; higher value use; cross-country regression analysis; doing business surveys; Access to Electricity; social insurance contribution; enforcement of regulation; exchange rate policy; construction of road; Exchange rate policies; nationally representative survey; labor force working; global financial crisis; privileges and immunity; performance and productivity; average productivity level; private sector activity; food and agricultural; firm size; informal firms; capital asset; Job Creation; firm performance; total employment; firm entry; standard error; high wage; value added; wage growth; micro firms; firm productivity; commerce sector; annual sale; Wage Bill; firm survey; minimum wage; employment growth; new job; job growth; labor demand; paid worker; firm location; Job Quality; beverage manufacturing; wage employment; human capital; low wage; new entrant; average wage; household enterprise; paying job; skilled labor; productivity gap; employment outcome; firm level; response rate; apparel manufacturing; female workers; entry rate; sectoral distribution; labor regulation; self-employed farmers; scale economy; export basket; contemporaneous correlation; international stage; manufacturing sector; gender composition; high share; significant correlation; panel data; explanatory variable; data quality; living standard; formal sector; census data; agriculture sector; consumer demand; regression results; firm exit; descriptive statistic; production input; virtuous cycle; increased demand; Business Climate; Real estate; productivity distribution; agglomeration effect; percent change; creating job; measure of use; rapid urbanization; insolvency resolution; panel regression; high concentration; retail computer; insolvency regime; price effect; moveable asset; summary statistic; sectoral composition; employee account; Collateral Registries; credit access; work status; informal worker; sample bias; wage work; disproportionate share; social security; property right; registration number; log wage; internet usage; informal employment; horizontal axis; national statistical; transport cost; tax rule; international market; raw material; foreign investor; animal oil; grain mill; unpaid worker; in family; tobacco product; firm-level employment; meat processing; employer contribution; local producer; trade links; firm-level analysis; available data; Employment Sector; live animal; paper issue; institutional environment; external market; market size; hiring decisions; job tenure; severance pay; automotive fuel; tax rate; low share; local innovation; economics literature; knowledge gap; average age; high employment; dynamic effect; dynamic change; monthly wage; hourly wage; adequate opportunity; age distribution; productive sector; gender difference; firm growth; productivity job; predictive power; internet technology; small sample; gender segregation; manufacturing activities; young age; technological innovation; low capital; high entry; threshold effects; international standard; wage effect; productivity gain; Gender Gap; firm structure; female workforce; tax-free imports; domestic input; production technology; target market; independent variable; real value; causal relationship; total sample; capital intensity; statistical significance; age variable; confidence interval (search for similar items in EconPapers)
Pages: 59
Date: 2018-09-01
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