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Sectoral amd Skill Contributions to Labor Productivity in Asia

Author

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  • Matthias Helble
  • Long Q Trinh

  • Trang Le

Abstract

Using a decomposition approach on data collected by the Asian Productivity Organization (APO) as well as World Input-Output data, it shows that in most Asian economies the services sector makes the largest contribution to labor productivity. Furthermore, it finds evidence of a major reallocation of labor from agriculture directly to services, bypassing the manufacturing sector. This finding challenges the traditional view that countries in their economic development need to have their workforce employed first in manufacturing before switching to services. Lastly, the paper studies how different skill levels contribute to labor productivity growth. It finds that high-skilled workers have contributed most to overall labor productivity growth in developing Asia. In services, high-skilled workers have mainly driven labor productivity, indicating that upskilling and training are instrumental in services-led development.

Suggested Citation

  • Matthias Helble & Long Q Trinh & Trang Le, 2019. "Sectoral amd Skill Contributions to Labor Productivity in Asia," Working Papers id:13015, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:13015
    Note: Institutional Papers
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    References listed on IDEAS

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    1. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    2. Jianmin Tang & Weimin Wang, 2004. "Sources of aggregate labour productivity growth in Canada and the United States," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(2), pages 421-444, May.
    3. Fernández, Rafael & Palazuelos, Enrique, 2018. "Measuring the role of manufacturing in the productivity growth of the European economies (1993–2007)," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 1-12.
    4. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    5. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
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    Cited by:

    1. Alistair Dieppe, 2021. "Global Productivity," World Bank Publications - Books, The World Bank Group, number 34015, April.

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    Keywords

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    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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