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Deconstructing the BRICs: Structural Transformation and Aggregate Productivity Growth

  • Voskoboynikov, I.
  • Timmer, M.P.
  • Vries, G.J. de
  • Erumban, A. A.
  • Wu H.X.

    (Groningen University)

This paper studies structural transformation and its implications for productivity growth in the BRIC countries based on a new database that provides trends in value added and employment at a detailed 35-sector level. We find that for China, India and Russia reallocation of labour across sectors is contributing to aggregate productivity growth, whereas in Brazil it is not. However, this result is overturned when a distinction is made between formal and informal activities. Increasing formalization of the Brazilian economy since 2000 appears to be growth-enhancing, while in India the increase in informality after the reforms is growth-reducing.

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File URL: http://irs.ub.rug.nl/ppn/33926442X
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Paper provided by Groningen Growth and Development Centre, University of Groningen in its series GGDC Research Memorandum with number GD-121.

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Date of creation: 2011
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Handle: RePEc:dgr:rugggd:gd-121
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