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Old and new dualisms in Latin America and Asia: labour productivity, international competitiveness and income distribution

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  • Escaith, Hubert

Abstract

Using sectoral growth accounting techniques from a structural perspective à la Lewis, the paper analyzes the structural determinants of labour productivity in Asia and Latin America, indicating a contrasted situation between both developing regions. While Asia appears to be engaged in a relatively smooth transition from the low productivity traditional activities to a more industrialized economy, the pattern emerging out of the Latin American data indicates the presence of polarizing forces, and the resurgence of a new dualistic economy. From a systemic perspective, Asia has been progressively closing the productivity gap with industrialised countries, gaining international competitiveness, while Latin America has been losing ground despite advances at the microeconomic level. Two structural trends led to the deterioration of the income distribution in Latin America: strong demand for high qualification workers, pushing up the salary of professionals and technicians (same happened in Asia); and a deficit of job opportunities in the manufacture sector, leading to an excess supply of labour in the services sector and a decline in value added per worker. The emergence of a large urban informal sector in Latin America epitomizes this situation. The structural models used for the analysis suggest also some lines of action for policy making, facilitating resource reallocation from low to high productivity sectors, while limiting spurious inter-sectoral shifts. This text is an unpublished author's translation of the original article "Dualismos antiguos y contemporáneos en América Latina y Asia" Revista Trabajo no.5, año 3, 2007; OIT/UAM México.

Suggested Citation

  • Escaith, Hubert, 2007. "Old and new dualisms in Latin America and Asia: labour productivity, international competitiveness and income distribution," MPRA Paper 14510, University Library of Munich, Germany, revised 2008.
  • Handle: RePEc:pra:mprapa:14510
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    File URL: https://mpra.ub.uni-muenchen.de/14510/1/MPRA_paper_14510.pdf
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    References listed on IDEAS

    as
    1. Helene Poirson Ward, 2000. "Factor Reallocation and Growth in Developing Countries," IMF Working Papers 00/94, International Monetary Fund.
    2. Bender, Siegfried & Li, Kui-Wai, 2002. "The Changing Trade and Revealed Comparative Advantages of Asian and Latin American Manufacture Exports," Center Discussion Papers 28478, Yale University, Economic Growth Center.
    3. Siegfried Bender & Kui-Wai Li, 2002. "The Changing Trade and Revealed Comparative Advantages of Asian and Latin American Manufacture Exports," Working Papers 843, Economic Growth Center, Yale University.
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    Cited by:

    1. Escaith, Hubert, 2009. "Trade Collapse, Trade Relapse and Global Production Networks: Supply Chains in the Great Recession (revised)," MPRA Paper 31864, University Library of Munich, Germany, revised Jun 2011.

    More about this item

    Keywords

    productivity; sectoral shift-share; transition; income distribution; competitiveness;

    JEL classification:

    • 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
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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