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Dualism and Cross-Country Growth Regressions

  • Jonathan Temple
  • Ludger Woessmann

This paper examines whether growth regressions should incorporate dualism and structural change. If there is a differential across sectors in the marginal product of labour, changes in the structure of employment can raise aggregate total factor productivity. The paper develops empirical growth models that allow for this effect in a more flexible way than previous work. Estimates of the models imply sizeable marginal product differentials, and reveal that the reallocation of labour can explain a significant fraction of the international variation in TFP growth.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1290.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1290
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