An Analysis of The Contribution of Economic Restructuring to Social Labor Productivity Growth: A Case Study of Vietnam

Abstract

This study analyzes and proposes a method to examine the impacts of sectorial restructuring on social labor productivity (LP) growth when changing the proportion of each sector in the total output values and the value-added rates out of sector outputs. This method aims to supplement or replace the shift share analysis (SSA)1, in which the central variable is the labor structure, with an application on the output. This new approach helps to avoid errors in calculation, and considers the aggregation of growth factors rather than labor mobility itself; hence, it provides a more comprehensive explanation of the origins of productivity growth and a meaningful assessment to improve the policies on restructuring economic sectors. The research uses methods of decomposing LP growth and explains the influence of factors contributing to productivity growth including: output restructuring, changing the quality of economic growth measured by the valueadded to gross output ratio, combination of interactions between structural change and change in value-added, and correlation between production expansion and labor attraction. The research analyzes the LP in Vietnam during 2000-2017 based on data collected from the general statistics office (GSO). Results show that the LP growth rate of Vietnam in recent years has improved but slowly due to the inefficient economic restructuring. It sheds light on proposing recommendations to increase the social labor productivity in Vietnam.