Sectoral decomposition of convergence in labor productivity : A re-examination from a new dataset
Dieppe, Alistair; Matsuoka, Hideaki (08.04.2022)
JulkaisusarjaBOFIT Discussion Papers
JulkaisijaBank of Finland
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-202204081133
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.