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Dualism and Cross-Country Growth Regressions

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  • Temple, Jonathan
  • Woessmann, Ludger

Abstract

This paper develops empirical growth models suitable for dual economies, and studies the relationship between structural change and economic growth. Structural change matters because, if the marginal product of labour varies across sectors, changes in the structure of employment can raise aggregate productivity. The models in the paper incorporate this effect in a more flexible way than previous work. Estimates of the models imply sizeable marginal product differentials, and indicate that the reallocation of labour makes a significant contribution to the international variation in productivity growth.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5655.

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Date of creation: Apr 2006
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Handle: RePEc:cpr:ceprdp:5655

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Keywords: dualism; structural change; TFP growth; wage differentials;

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