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Unconditional convergence of labor productivity in the service sector

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  • Kinfemichael, Bisrat
  • Morshed, A.K.M. Mahbub

Abstract

Using disaggregated service sector data for 95 countries, we found unconditional convergence in real labor productivity for the service sector. The aggregate service sector yields a large unconditional convergence coefficient of −0.035; we also found the presence of unconditional convergence for individual sub-sectors. Since the service sector now faces both domestic and international competition, the presence of unconditional convergence in labor productivity in this sector is not surprising. Unlike Rodrik (2013), we found evidence of unconditional convergence for aggregate labor productivity in the most recent data available, and the convergence of the service sector productivity appears to be a crucial component of this reversal.

Suggested Citation

  • Kinfemichael, Bisrat & Morshed, A.K.M. Mahbub, 2019. "Unconditional convergence of labor productivity in the service sector," Journal of Macroeconomics, Elsevier, vol. 59(C), pages 217-229.
    • Handle: RePEc:eee:jmacro:v:59:y:2019:i:c:p:217-229
    DOI: 10.1016/j.jmacro.2018.12.005
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    4. Bhattarai, Keshab & Qin, Weiguang, 2022. "Convergence in labor productivity across provinces and production sectors in China," The Journal of Economic Asymmetries, Elsevier, vol. 25(C).
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    More about this item

    Keywords

    Unconditional convergence; Labor productivity; Service sector;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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