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Labour Productivity Growth in the Industrial Sector of Indonesia: Structural Bonus or Structural Burden?

Author

Listed:
  • Lilis Siti Badriah

    (Department of Economics, Faculty of Economics and Business, Jenderal Soedirman University)

  • Armida S. Alisjahbana

    (Department of Economics, Faculty of Economics and Business, Padjadjaran University)

  • Kodrat Wibowo

    (Department of Economics, Faculty of Economics and Business, Padjadjaran University)

  • Ferry Hadiyanto

    (Department of Economics, Faculty of Economics and Business, Padjadjaran University)

Abstract

The economic structural change on the output side is accompanied by the reallocation of labour from the agricultural sector to the industrial sector. Some studies show the different effects of labour reallocation on labour productivity growth. This study analyses labour productivity growth in the manufacturing sector in relation to economic structural changes in Indonesia. The analytical methods used are shiftshare and panel data regression models using secondary data of 30 provinces from 2003-2014. The results show economic structural change through labour reallocation decreases growth of labour productivity (structural burden) although productivity continues to grow.

Suggested Citation

  • Lilis Siti Badriah & Armida S. Alisjahbana & Kodrat Wibowo & Ferry Hadiyanto, 2019. "Labour Productivity Growth in the Industrial Sector of Indonesia: Structural Bonus or Structural Burden?," Malaysian Journal of Economic Studies, Faculty of Business and Economics, University of Malaya & Malaysian Economic Association, vol. 56(1), pages 139-159, June.
    • Handle: RePEc:mjr:journl:v:56:y:2019:i:1:p:139-159
    DOI: 10.22452/MJES.vol56no1.7
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    Cited by:

    1. Odusanya, Ibrahim A. & Toriola, Anu K. & Ajayi, Felix Odunayo, 2023. "The Nexus Between Labour Productivity and Agricultural Development in Sub-Saharan Africa (1991-2021)," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 11(4), October.

    More about this item

    Keywords

    Input reallocation; labour productivity growth; structural bonus; structural burden; structural change;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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