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Construction Productivity and Income Convergence

Author

Listed:
  • Paul, Saumik

    (University of Manchester)

  • Sen, Kunal

    (UNU-WIDER)

Abstract

This paper examines the implications of heterogeneity in construction productivity on cross-country income disparity. Using a sample of 168 countries, we estimate the 10:1 spread in construction productivity as a factor of 49-fold in 2017. The construction productivity gap falls by 46 percent when production networks are incorporated in the development accounting framework. Based on counterfactual analysis, the elimination of cross-country disparity in construction productivity lowers the 10:1 spread in GDP per capita by 55 percent. Variations in both the intermediates share of construction output and complementarity in intermediate inputs across countries drive the aggregate effects of construction productivity shock.

Suggested Citation

  • Paul, Saumik & Sen, Kunal, 2026. "Construction Productivity and Income Convergence," IZA Discussion Papers 18377, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18377
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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