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Productivity Growth and Labor Reallocation: Latin America versus East Asia

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  • Murat Ungor

    (University of Otago)

Abstract

Over the period 1963 to 2010, Latin American countries exhibit much slower de-agriculturalization than East Asian countries. The manufacturing employment share has been almost stagnant in Latin America, but exhibits a hump-shaped pattern in Korea and Taiwan. Both groups have moved increasingly toward service-based economies. A nine-sector general equilibrium model, treating sectoral productivity growth rates as exogenous, accounts for some of the differing sectoral allocations of employment in Latin America and East Asia over the sample period. I perform a series of experiments, replacing the sectoral labor productivity growth rates in each sector for each Latin American country with the corresponding growth rates in Korea and Taiwan. Low aggregate productivity growth in Latin America is an economy-wide phenomenon concerning all sectors; however, the findings highlight the possible importance of raising productivity in manufacturing and wholesale to have significant increases in aggregate productivity growth rates. I focus attention on the importance of the level of disaggregation in examining the relationship between labor productivity growth and sectoral movement of labor. Some evidence is presented in linking sectoral policies to productivity growth in Latin America and East Asia. (Copyright: Elsevier)

Suggested Citation

  • Murat Ungor, 2017. "Productivity Growth and Labor Reallocation: Latin America versus East Asia," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 25-42, March.
  • Handle: RePEc:red:issued:11-273
    DOI: 10.1016/j.red.2016.12.004
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    Cited by:

    1. Fukao, Kyoji & Paul, Saumik, 2017. "The Role of Structural Transformation in Regional Convergence in Japan: 1874-2008," SSPJ Discussion Paper Series DP17-001, Service Sector Productivity in Japan: Determinants and Policies, Institute of Economic Research, Hitotsubashi University.
    2. repec:zbw:espost:171379 is not listed on IDEAS
    3. Fukao, Kyoji & Paul, Saumik, 2017. "The Role of Structural Transformation in Regional Convergence in Japan: 1874-2008," Discussion Paper Series 665, Institute of Economic Research, Hitotsubashi University.

    More about this item

    Keywords

    East Asia; Latin America; Sectoral productivity differences; Structural transformation;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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