Accounting for productivity convergence: the role of sectors and structural change

DOI

This paper is number 198 in the Groningen Growth and Development's Research Memoranda series. Abstract This paper examines the sources of aggregate labour productivity convergence across countries during 1990-2018, proposing a method to account for the contributions of sectors and structural change. Using newly developed purchasing power parities (PPPs) for sectoral value added, we analyse 66 countries and find that agriculture plays a predominant role in explaining aggregate labour productivity convergence. This is driven by two factors: strong labour productivity convergence within agriculture and substantial labour reallocation away from agriculture, especially in developing countries. Our analysis reveals minimal convergence in the non-agricultural economy, underscoring agriculture's importance. We also document a declining role of resource misallocation over time in explaining cross-country productivity differences. These findings challenge an emphasis on manufacturing-led development pathways, suggesting that agricultural productivity growth and subsequent labour reallocation have been the primary drivers of aggregate productivity convergence in recent decades.

Identifier
DOI https://doi.org/10.34894/777ZW3
Metadata Access https://dataverse.nl/oai?verb=GetRecord&metadataPrefix=oai_datacite&identifier=doi:10.34894/777ZW3
Provenance
Creator Inklaar, Robert; Marapin, Ryan
Publisher DataverseNL
Contributor GGDC
Publication Year 2025
Rights CC-BY-4.0; info:eu-repo/semantics/openAccess; http://creativecommons.org/licenses/by/4.0
OpenAccess true
Contact GGDC (University of Groningen)
Representation
Resource Type Dataset
Format application/pdf
Size 682685
Version 1.0
Discipline Agriculture, Forestry, Horticulture, Aquaculture; Agriculture, Forestry, Horticulture, Aquaculture and Veterinary Medicine; Life Sciences; Social Sciences; Social and Behavioural Sciences; Soil Sciences