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

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Title: Sectoral decomposition of convergence in labor productivity : A re-examination from a new dataset
Author: Dieppe, Alistair ; Matsuoka, Hideaki
Organization: Bank of Finland
Department / Unit: Bank of Finland Institute for Emerging Economies (BOFIT)
Series: BOFIT Discussion Papers
Series number: 4/2022
Year of publication: 2022
Publication date: 8.4.2022
Pages: 28
Subject (yso): työvoima; toimialat; tuottavuus; maatalous
Keywords: Bofit-kokoelma
JEL: O1; O11; O4
Other keywords: Labor productivity; Shift-share decomposition; β-decomposition; New sectoral database
Abstract: This paper investigates how the sector-specific source or the changing sectoral composition of labor productivity has contributed to β-convergence, using a newly constructed eight-sector database. The main findings are twofold. First, both within and sectoral reallocation have become important drivers of β-convergence in labor productivity. Second, agricultural productivity growth has been a significant contributor to β-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.
Rights: https://helda.helsinki.fi/bof/copyright


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