Labour Productivity Convergence Research Articles

Productivity Convergence in Manufacturing: A Hierarchical Panel Data Approach

Despite its paramount importance in the empirical growth literature, productivity convergence analysis has three problems that have yet to be resolved: (1) little attempt has been made to explore the hierarchical structure of industry-level datasets; (2) industry-level technology heterogeneity has largely been ignored; and (3) cross-sectional dependence has rarely been allowed for. This paper aims to address these three problems within a hierarchical panel data framework. We propose an estimation procedure and then derive the corresponding asymptotic theory. Finally, we apply the framework to a dataset of 23 manufacturing industries from a wide range of countries over the period 1963-2018. Our results show that both the manufacturing industry as a whole and individual manufacturing industries at the ISIC two-digit level exhibit strong conditional convergence in labour productivity, but not unconditional convergence. In addition, our results show that both global and industry-specific shocks are important in explaining the convergence behaviours of the manufacturing industries.

Convergence in Labor Productivity Across Provinces and Production Sectors in China

Convergence in Labor Productivity Across Provinces and Production Sectors in China

Regional Economic Integration and Productivity Convergence: Empirical Evidence from East Asia

The study attempts to seek evidence on regional economic integrationin driving labor productivity convergence in low-and middle-income East Asian states towards Japan, the country assumed to be the regional technology leader. The labor productivity convergence of low-and middle-income East Asian countries towards their rich neighbor is modelled against their national levels of innovation, technology spill-oversfrom the regional economic leader and their productivity differential with the frontier country. The hypothesized relationship is empirically verified for seven East Asian states, using a robust econometric approach. The time-series test estimates under Error Correction Representation yield absolute support in favor of valid productivity convergence occurring between Japan and its low-and middle income neighbors. However, panel data estimates generated with better statistical power outperform the time-series test findingsand these results reject the significance of Japan as the regional productivity growth driver for its regionaldevelopingstates.

Club convergence of labour productivity in agriculture: Evidence from EU countries

This paper studies club convergence in relation to labour productivity in the agriculture industry of 28 European Union countries for the period 2005 to 2018. The countries were divided into three groups which were homogeneous in terms of level of development in the agricultural sector. The presence of convergence in the groups of countries was verified by using a panel-data model of conditional β-convergence. Then, convergence processes were investigated within clubs of countries. Convergence processes took place in the groups of countries with low and medium levels of labour productivity. In the club of countries where labour productivity was high, opposite processes (i.e. divergence) were observed.

Labor Productivity Convergence in Mexico

Mexico exhibits the lowest labor productivity of all OECD countries and main groups of nations. However, little is known about its behavior at the sector-state level, or whether it was affected by the global financial crisis (GFC). Therefore, this paper explores the extent to which the GFC affected the convergence—catch-up—process of seventeen Mexican economic sectors in the 1999–2014 period. Moreover, this paper identifies the regions that were more affected by the GFC and analyzes whether the sectoral composition is driving the states’ labor productivity convergence patterns. Results suggest that the GFC pushed 13 economic sectors toward convergence and changed the direction of the pre-GFC catch-up trend in 15; that the labor productivity convergence pattern barely changed in the north of Mexico in the short term, and that the biggest changes occurred in the center and south regions; and that states’ sectoral composition drives their labor productivity patterns.

Analysing labour productivity and its economic consequences in the two Spanish tourist archipelagos

The analysis of productivity in tourism has mainly focused at sectoral level. However, the strong dependence on services and its impact at macroeconomic level in tourism-led economies should require a deeper analysis of productivity, especially when faced with increased cheaper competition. This article estimates a stochastic production frontier and compares the differences in labour productivity between industrial-led and tourism-led provinces in Spain. This analysis provides novel results in terms of technological changes by differentiating industrial-led province from tourism-led province. Finally, these labour productivities are introduced in a dynamic computable general equilibrium model of the two Spanish archipelagos to analyse their respective macroeconomic impact. The results show that the increase in permanent jobs in both economies leads to a convergence in labour productivity with those that are industry led. Furthermore, labour productivity gains improve competitivity against foreign destinations and enhance sectoral diversificación. However, tourism may crowd out domestic demand and investment.

A Sectoral Anatomy of the Spanish Productivity Puzzle

Income per capita in Spain relative to that of other advanced EU countries held stable at around 90% from 2000 to 2016. Stagnant labour productivity is at the root of this lack of convergence. This paper examines these developments from a sectoral perspective based on recently released EU KLEMS data. Our main findings are as follows: (i) Spain has lower productivity levels vis-a-vis other EU countries in most sectors, with only 4 out of 23 sectors exhibiting higher productivity in Spain: accommodation and food services, agriculture, electricity and gas supply, and information and communication services. Moreover, the allocation of employment towards low-productivity sectors accounts for half of the aggregate Spain-EU productivity gap in levels; (ii) turning to the changes in the 2000-2016 period, the overall lack of convergence is driven by a divergence in productivity relative to EU countries, especially within services sectors; (iii) while both ICT (Information and Communication Technology) and non-ICT capital in Spain converged towards European levels, Total Factor Productivity (TFP) divergence in most sectors explains the lack of convergence in labour productivity. Finally, we explore one potential explanation for this pattern: the TFP divergence and ICT capital convergence can be rationalised in the presence of complementarities between ICT-capital and labour force skills. Indeed, our industry-country regression analysis suggests that the dismal performance of Spanish TFP might be related to the significant deficit in the population’s skills as proxied by PIAAC-OECD scores.

Labor Productivity Convergence in Indonesia: Spatially Dynamic Panel Data Analysis

The problem of labor productivity in Indonesia is a regional and sectoral inequality. To know the time required to remove inequality, can be measured by the level of convergence of labor productivity. The research would analyze the rate of sectoral labor productivity convergence among provinces in Indonesia spatially and identify the determinant factors of labor productivity. The analytical methods used is spatial dinamic panel data with Spatially Corrected Blundell-Bond (SCBB) estimation method. The results show that there are spatially sectoral labor productivity convergence. Primary sector takes the longest half-life convergence of 7-8 years, while secondary takes 1-2 years and tertiary sector takes 3-4 years. Furthermore, the Gross Capital Fixed Formation, Mean Years of Schooling, and real wage sectoral are significantly have positive affect to the labor productivity while Life Expectancy is significantly have negative affect to labor productivity.Keywords : convergence, spatial analysis, labor productivity

LABOUR PRODUCTIVITY GROWTH AND CONVERGENCE IN AGRICULTURE OF THE EUROPEAN UNION

The main objective of the presented paper is to examine and assess the changes in labour productivity in the EU agriculture in the context of the diversity of its level and dynamics of change underlying the identification of labour productivity convergence/divergence processes taking place in agriculture. The labour productivity convergence processes in the EU agriculture were analysed based on data from the period between 2005 and 2016, by testing two its basic types, namely sigma and beta convergence. The analysis applied statistical measures describing the degree of labour productivity differentiation in agriculture of the EU countries and cross-sectional regression function. The research showed that sigma and beta convergence exist in general in the EU-28 countries.Keywords: labour productivity, convergence, agriculture, EU.JEL Classifications: Q13, O47, C2DOI: https://doi.org/10.32479/ijefi.8041

Przemiany i uwarunkowania wydajności pracy w rolnictwie Unii Europejskiej w latach 2005-2016

Celem pracy było przedstawienie przemian wydajności pracy w rolnictwie Unii Europejskiej (UE) w latach 2005-2016 oraz propozycji metodycznej dekompozycji wskaźnika wydajności pracy w rolnictwie. W zaproponowanych trzech modelach dekompozycji wydajności pracy uwzględniono siedem czynników (wskaźników), tj. produktywność nakładów, produktywność ziemi, wskaźnik wartości dodanej, opodatkowanie produkcji, dopłaty do produkcji, uzbrojenie zasobów pracy w ziemię oraz poziom intensywności produkcji rolniczej. Ponadto, na podstawie metody deterministycznej dokonano oceny zmian wydajności pracy w rolnictwie UE oraz w Polsce. Badania wykazały, że w latach 2005-2016 wydajność pracy mierzona wartością dodaną brutto zwiększała się w UE-28 średniorocznie o 2,13%, w UE-15 tylko 0,98%, a w UE-13 znacznie szybciej, tj. o 3,45%. Oznacza to, że w rolnictwie UE zachodzą procesy konwergencji wydajności pracy. W świetle analizy deterministycznej głównymi czynnikami wzrostu wydajności pracy w rolnictwie UE-28 i w Polsce były wzrost intensywności produkcji oraz wzrost uzbrojenia pracy w zasoby ziemi. Korzystny kierunek przemian wydajności pracy osłabiała malejąca efektywność wytwarzania mierzona produktywnością nakładów oraz udziałem wartości dodanej w przychodach.

Tradability and productivity growth differentials across EU Member States

We apply the tradable-nontradable framework (T-NT) to evaluate the lack of convergence in labor productivity among EU Member States. Our results show that increases in overall productivity are primarily due to the tradable and not the nontradable sectors of production. The low productivity growth in peripheral EU countries before the crisis was accompanied by a sharp increase in the production of nontradables (i.e. nontradable goods and services) relative to other EU countries. We identify differences in the legal systems and the quality of public institutions, among others, as factors relevant for explaining the observed productivity growth differentials. Our findings have implications for the European Commission’s macroeconomic imbalance procedures since the T-NT approach allows identifying patterns of real divergence on a disaggregated level.

A hierarchical analysis of structural change and labour productivity convergence across regions, countries and industries within the EU

ABSTRACTThis study explores the effect of structural change on the process of labour productivity convergence at different levels of data aggregations (regions, industries, countries), which is also known as hierarchical convergence analysis in the recent literature. Different forms of structural changes have occurred in the European Union, for instance, variations in the share of employment in different industries, variations in the demand pattern and variations in trade patterns and advancement in technology, which may have an influence on the nature of convergence. Earlier studies on convergence have neglected the effect of the structural change, which may have resulted in different conclusion about the convergence. Based on the results, the study found that the nature of convergence changes after considering the effect of the structural change.

The rise of services and convergence in labor productivity among countries

ABSTRACTStudies of economic convergence among countries usually focus on per capita GDP or on a particular sector, such as labor productivity in the manufacturing sector. Using value-added data from the United Nations Statistics Division’s National Accounts and employment data from the International Labour Organization (ILO), we compile labor productivity data for 160 countries for the period 1991–2016 in order to examine labor productivity convergence for broad sectors and for the aggregate economy. The results demonstrate the emergence of convergence in labor productivity among countries. The rate of convergence increases significantly when we consider only 141 countries, excluding the low-income countries. The sectoral convergence test reveals that the service sector is the leading force behind the recently observed catching-up in labor productivity among countries, followed by manufacturing. Reallocation of labor across sectors seems to have increased aggregate productivity in developing countries while reducing it in developed countries.

KONWERGENCJA WYDAJNOŚCI PRACY W ROLNICTWIE UNII EUROPEJSKIEJ

Labour productivity is commonly considered as one of the most important parameters of development of economies, because it is conductive to reduction of costs, increase in supply of cheaper goods and services, higher dynamics of the market and higher purchasing power of societies, their wealth and competitive ability. But labour productivity is – at the backdrop of the EU countries – highly diversified, including in particular in agriculture where its level is much lower than in other sectors of the economy. The main objective of the presented paper is to examine and assess the changes in labour productivity in the EU agriculture in the context of the diversity of its level and dynamics of change underlying the identification of labour productivity convergence/divergence processes taking place in agriculture. The labour productivity convergence processes in the EU agriculture were analysed based on data from the period between 2005 and 2016, by testing two its basic types, namely sigma and beta convergence. The analysis applied statistical measures describing the degree of labour productivity differentiation in agriculture of the EU countries and cross-sectional regression function. The research showed that sigma and beta convergence exist in general in the EU-28 countries and in the group of the new Member States (UE-13). In the group of old Member States, however, no sigma convergence/divergence was identified, but statistically significant beta divergence was noted.

European Funds for Rural Areas and Regional Convergence of Agriculture in Poland

SummarySubject and purpose of work:The aim of the article is to assess the phenomena of sigma convergence of labour productivity in agriculture and other sectors of rural economy in Polish regions during 2003 – 2014 in the context of the amount of European funds designated for agriculture and rural areas. European supprt was compared to the Gross Added Value of agriculture, forestry, hunting and fishery.Materials and methods:The subject literature and statistical data received from the Agricultural Modernization Agency and the Local Data Bank of the Central Statistical Office were used. The empirical data regarding the level of agriculture in regions as well as the data on the resources utilised from the European Union were examined in order to assess the correlation between them and the phenomenon of regional sigma-convergence.Results:The study confirms the sigma convergence of the Gross Value Added per units of funding obtained from the European Union Budget and different level of sigma convergence of GVA / PE in regions.Conclusions:Sigma convergence assessment of the Gross Value Added per person employed in regions shows that in the analyzed period three phases could be distinguished: convergence (2003 – 2008), divergence (2008 – 2010) and stagnation (2010 – 2014).

Tradability and Productivity Growth Differentials Across EU Member States

We apply the tradable-nontradable framework (T-NT) to evaluate the lack of convergence in labor productivity among EU Member States. Our results show that increases in overall productivity are primarily due to the tradable and not the nontradable sectors of production. The low productivity growth in peripheral EU countries before the crisis was accompanied by a sharp increase in the production of nontradables (i.e. nontradable goods and services) relative to other EU countries. We identify differences in the legal systems and the quality of public institutions, among others, as factors relevant for explaining the observed productivity growth differentials. Our findings have implications for the European Commission’s macroeconomic imbalance procedures since the T-NT approach allows identifying patterns of real divergence on a disaggregated level.

Unconditional convergence of labor productivity in the service sector

Using disaggregated service sector data for 95 countries, we found unconditional convergence in real labor productivity for the service sector. The aggregate service sector yields a large unconditional convergence coefficient of −0.035; we also found the presence of unconditional convergence for individual sub-sectors. Since the service sector now faces both domestic and international competition, the presence of unconditional convergence in labor productivity in this sector is not surprising. Unlike Rodrik (2013), we found evidence of unconditional convergence for aggregate labor productivity in the most recent data available, and the convergence of the service sector productivity appears to be a crucial component of this reversal.

ZWROT Z INWESTYCJI FARMY FOTOWOLTAICZNEJ W RAMACH ZMIENIAJĄCYCH SIĘ PRZEPISÓW

One of the key goals of European integration is the reduction of development disparities referred to as convergence. Convergence occurs in two forms as sigma convergence and beta convergence. Sigma convergence means a decrease in dispersion and differentiation over time, and the essence of beta convergence is faster development of less developed regions or countries, which results in catching up. The aim of the article is to study the convergence of the level of development of the sectors of the rural economy in the regions of Poland between 2003 and 2014. The economic results, in the context of the size of funds raised from European funds, measured by the gross value added of agriculture, forestry, hunting and fisheries, were obtained from the Local Data Bank. Data on the value of the funds used were obtained from the Agency for Restructuring and Modernization of Agriculture. Statistical methods describing the state of differentiation of regions and the function of regression were used for the analysis. The research confirmed partial occurrence of labour productivity convergence in the rural sectors of the Polish regions and a positive correlation of gross value added with the amount of obtained funds from European funds.

Infrastructure and Labour Productivity Convergence in Gunungkidul Region

The paper examines whether labour productivity converges or diverges. This research estimates the convergence of labour productivity, and the effects of infrastructure to support this convergence, based on a set panel data comprising 18 districts in Gunungkidul Regency from 2009 to 2016. The secondary data published by the Statistics of DIY is used in this study. The infrastructure includes educational facilities, health facilities and length of the road. A fixed-effect model presents that there is a process of convergence of labour productivity among districts in Gunungkidul Regency. Moreover, the result shows that infrastructure has a positive effect on labour productivity. This research finds that labour productivity, in the lagging districts, tends to grow faster than advanced ones. Thus, the labour productivity gap between districts will disappear. A better educational and health facilities supports the speed of the knowledge transfer process to generate productive labour. For supporting the convergence of labour productivity, the local government has to improve infrastructure especially in lagging districts. Likewise, improvements in road facilities solve the problem of high-cost distribution to increase labour productivity.

Convergence of labor productivity across the US states

Most studies of labor productivity convergence among US states base their analyses on state-level GDP per worker. Such aggregated analysis may hide important information about the role of sectors, and changes in the sectoral composition of these economies, in explaining economy-wide convergence results. Using highly disaggregated data for the period 1987–2015 from the US Bureau of Economic Analysis, we examine sectoral unconditional convergence in labor productivity in the US states. Our results demonstrate a general slowing down in the rate of convergence of labor productivity in the latter years of this period. The sectoral analysis also indicates that manufacturing was the primary driver of convergence during the 1987–1997 period, which had the highest rate of convergence; the role of this sector, however, has diminished in recent years. Several factors—such as the decline in interstate migration, rising housing costs in major cities, agglomeration, and structural changes in the US economy that have reduced the role of manufacturing—may have contributed to the rise in the labor productivity differential among US states.