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Productivity, structural change and skills dynamics: Evidence from a half century analysis in Tunisia and Turkey

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  • Gunes Asik
  • Ulas Karakoc
  • Mohamed Ali Marouani
  • Michelle Marshalian

Abstract

This article explores the contribution of structural change and the skill upgrading of the labor force to productivity in Tunisia and Turkey in the institutional context of the post-World War II period. Our growth decomposition shows that productivity is mainly explained by intra-industry changes for both countries during the import substitution period. Structural change played an important role in Turkey for a longer period of time than in Tunisia. Based on an instrumental variable regression setting, we find evidence that overall, the change in the share of high-educated workers had a causal impact on productivity levels in Turkey, but no such relation was found in Tunisia. Secondly, we show that this productivity increase has mainly been driven by the reallocation of higher educated labor between sectors rather than the absorption of highly educated workers within sectors. In Tunisia we do not find evidence of links between education demand and productivity. Moreover, the evidence from the instrumental variable regressions show that when we exclude the government sector in Tunisia, the overall skills upgrading is negatively associated with productivity growth, suggesting a downward return to educated labor demand over time.
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  • Gunes Asik & Ulas Karakoc & Mohamed Ali Marouani & Michelle Marshalian, 2019. "Productivity, structural change and skills dynamics: Evidence from a half century analysis in Tunisia and Turkey," Working Papers 20190001, UMR Développement et Sociétés, Université Paris 1 Panthéon-Sorbonne, Institut de Recherche pour le Développement.
  • Handle: RePEc:uds:wpaper:20190001
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania

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