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Engines of Sectoral Labor Productivity Growth

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  • Barany, Zsofia
  • Siegel, Christian

Abstract

We study the origins of labor productivity growth and its differences across sectors. In our model, sectors employ workers of different occupations and various forms of capital, none of which are perfect substitutes, and technology evolves at the sector-factor cell level. Using the model we infer technologies from US data over 1960-2017. We find sector-specific routine labor augmenting technological change to be crucial. It is the most important driver of sectoral differences, and has a large and increasing contribution to aggregate labor productivity growth. Neither capital accumulation nor the occupational employment structure within sectors explains much of the sectoral differences.

Suggested Citation

  • Barany, Zsofia & Siegel, Christian, 2019. "Engines of Sectoral Labor Productivity Growth," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203596, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc19:203596
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    Cited by:

    1. Sizhong Sun, 2023. "Firm heterogeneity, worker training and labor productivity: the role of endogenous self-selection," Journal of Productivity Analysis, Springer, vol. 59(2), pages 121-133, April.
    2. Sen, Ali, 2020. "Structural change within the services sector, Baumol's cost disease, and cross-country productivity differences," MPRA Paper 99614, University Library of Munich, Germany.
    3. Diego A. Comin & Ana Danieli & Martí Mestieri, 2020. "Income-driven Labor Market Polarization," NBER Working Papers 27455, National Bureau of Economic Research, Inc.
    4. Georg Duernecker & Berthold Herrendorf, 2022. "Structural Transformation of Occupation Employment," Economica, London School of Economics and Political Science, vol. 89(356), pages 789-814, October.
    5. L. Rachel Ngai & Orhun Sevinc, 2020. "A Multisector Perspective on Wage Stagnation," Discussion Papers 2026, Centre for Macroeconomics (CFM).
    6. Nong, Duy & Mason-D’Croz, Daniel & Lu, Yingying & Marcos Martinez, Raymundo & Palmer, Jeda, 2021. "An introduction of GTEM-Food: A baseline calibration with a focus on food," Conference papers 333304, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Pena, Werner & Siegel, Christian, 2023. "Routine-biased technical change, structure of employment, and cross-country income differences," CEPR Discussion Papers 18366, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    biased technological change; structural transformation; labor productivity;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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