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

Alistair Dieppe and Hideaki Matsuoka

No 4/2022, BOFIT Discussion Papers from Bank of Finland Institute for Emerging Economies (BOFIT)

Abstract: This paper investigates how the sector-specific source or the changing sectoral composition of labor productivity has contributed to Ø-convergence, using a newly constructed eightsector database. The main findings are twofold. First, both within and sectoral reallocation have become important drivers of Ø-convergence in labor productivity. Second, agricultural productivity growth has been a significant contributor to Ø-convergence, whereas catch-up in other sectors has only contributed a small amount to convergence. The strong growth of the agriculture sector has been the most important driver of aggregate productivity convergence even though agricultural productivity itself in low-income countries is not converging to that in advanced economies.

Keywords: Labor productivity; Shift-share decomposition; Ø-decomposition; New sectoral database (search for similar items in EconPapers)
JEL-codes: O1 O11 O4 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-eff and nep-tid
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https://www.econstor.eu/bitstream/10419/253693/1/BOFIT-DP-2204.pdf (application/pdf)

Related works:
Working Paper: Sectoral Decomposition of Convergence in Labor Productivity: A Re-examination from a New Dataset (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofitp:bdp2022_004

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