Structural drivers of productivity and employment growth: a decomposition analysis for 81 countries

Abstract

The paper uses accounting methods to decompose aggregate labour productivity and employment growth into their sectoral components as well as into within-sector and employment reallocation effects for a sample of 81 developed and developing countries using data going back to the mid-1980s. Key findings are that aggregate labour productivity growth for developing countries taken together is driven as much by services as by industry, in spite of strong differences between countries, and that within-sector effects on aggregate labour productivity growth are more important than employment reallocation effects, a pattern that holds for all regions.