Differences In Labor Productivity Research Articles

Analisis Ekspor Dan Produktivitas Tenaga Kerja di Industri Minyak Kelapa Sawit Indonesia: Bukti Empiris di Level Perusahaan Menengah-Besar Tahun 2010-2015

This study aims to estimate the effect of exports on labor productivity in the Indonesian palm oil industry for the 2010-2015 period. This study uses two models. In Model I, export is represented by a dummy variable, while in Model II it is represented by a percentage of the value of exported production. The estimation method used in this study is a panel with a random effect model (REM) method. The results showed that capital, wages and market share had a positive effect on labor productivity. The increase in this variable will increase productivity. Conversely, firm size has a negative effect on labor productivity. Indicates that medium-sized companies have higher productivity than large companies. Meanwhile, export variables both dummy and export percentage are not significant. It shows that there is no difference in labor productivity between companies that export and not.

Minimum Wage Policy: Is There Any Impact on Low Skilled Workers in Electrical and Electronics Companies in Malaysia?

Wage are the greatest pushing factor for many workers to work and positively relates to employee life satisfaction. Meanwhile, fringe benefits improve the skills and knowledge of workers and enhance the organization’s reputation. Minimum wage policies around the world uphold the principle to provide a basic living wage for their workers. Nevertheless, the impact of national minimum wage policy on Malaysian employees, in particular, was the least explored since enacted into law in 2012. This study examines the minimum- wage impact on low-level skilled workers in the electrical and electronics industry in Malaysia. Minimum wage can have an effect on labor productivity and fringe benefits, particularly training, allowances, and insurance, have become important research topics. As such, this research discusses the effect of minimum wages on labor productivity and fringe benefits of employees. A semi-structured survey questionnaire was distributed to 600 employees in electrical and electronics firms in Penang and Kulim Industrial Zones. Data from 432 questionnaires were quantitatively analyzed using Exploratory Data Analysis (EDA). The findings suggest that employers should make some adjustments in administering the wage scale due to the implementation of minimum wage national policy that has impacted firms’ costs and incomes. The results also found that the minimum wage affects labor productivity and wage differences among workers. Meanwhile, the minimum wage does not adversely affect the adjustments to the fringe benefits, except for the provision of training. This study recommends more strategic plans and negotiations between stakeholders on wage and fringe benefits that would warrant continuous positive effects for both workers and employers.

Organization of remote work in the context of digitalization

The analysis of the remote work organization indicates the certain reserves in the field of professional activity, manifested in three groups of effects: individual-personal, social-psychological and organizational-managerial. Individual-personal effects are connected with the professional’s personality transformation under the influence of professional environment digitalization: a change in the emotional side of the activity, experiencing a lack of information about the colleagues’ work, feedback about their role in the overall result. As a result, there appears a fear of missing out; a decrease of analytical thinking and critical perception of professional situations; an increase of physical and psychological fatigue and emotional burnout. Social-psychological effects are due to the peculiarities of interaction in digital technologies conditions, which generates new and modernizes the existing social and cultural communication norms and network etiquette. At online conferences the ratio of visual and auditory components of nonverbal communication changes, the role of listening increases, and there is a greater focus on content in comparison with face-to-face communication. The differences in labor productivity at different communication modes are revealed. Informal interactions, the sense of professional and organizational involvement are reduced. The work-life balance is disturbed. Organizational and managerial effects of remote work are associated with the implementation of labor regulation, control and assessment, staff motivation, forms of employment, organizational membership and commitment, job satisfaction, trust in teams, the composition and structure of work teams, leadership, organization of workplaces and business communications. Many of the organizational factors are closely interconnected.

The Equilibrium Impact of Agricultural Risk on Intermediate Inputs and Aggregate Productivity

AbstractI consider the aggregate impact of low intermediate input intensity in the agricultural sector of developing countries. In a dynamic general equilibrium model with idiosyncratic shocks, incomplete markets, and subsistence requirements, farmers in developing countries use fewer intermediate inputs because it limits their exposure to uninsurable shocks. The calibrated model implies that Indian agricultural productivity would increase by 16% if markets were complete, driven by quantitatively important increases in both the average real intermediate share and measured TFP through lower misallocation. I then extend the results to consider the importance of risk in other contexts. First, the introduction of insurance decreases cross-country differences in agricultural labour productivity by 14%. Second, scaling the introduction of improved seeds to decrease downside risk reduces inequality by reallocating resources from rich to poor farmers via equilibrium effects. This reallocation substantially increases aggregate productivity relative to what would be expected from extrapolating the partial equilibrium impact.

Capital Obsolescence and Agricultural Productivity*

AbstractThis article argues that accounting for capital-embodied technology greatly increases the importance of capital in explaining cross-country differences in agricultural labor productivity. To do so, we draw on a novel data set of agricultural capital prices. We document that new capital is more expensive in richer countries, both in absolute terms and relative to old capital. A model of endogenous adoption of capital of different quality links these price differences to the path of capital-embodied technology. In particular, our model recovers the level of embodied technology from the price of new capital and the growth rate of embodied technology from the price of new capital relative to old capital. We then measure the stocks of quality-adjusted capital in agriculture for a sample of 16 countries at different stages of development. We find that adjusting for differences in quality almost doubles the importance of capital in accounting for cross-country differences in agricultural labor productivity: from 21% to 37%. In addition, improvements in capital quality have been an important source of agricultural labor productivity growth over the past 25 years, accounting for 21% and 35% of the productivity growth in poor and rich countries, respectively.

Heterogeneous unit labor costs and profit margins in an economy with vintage capital: an amended neo-Kaleckian model

Post-Keynesian literature studying the impact of functional income distribution on economic activity and growth focuses on indirect demand effects (i.e., the consequences of real wage changes on aggregate demand components). The purpose of this article is to explore two points neglected by this literature. First, it ignores the direct supply effects corresponding to the impact of real wage changes on firms’ current profitability. Second, it does not explicitly take into account capital heterogeneity as a consequence of embodied technical progress. We, therefore, analyze the properties of a neo-Kaleckian model that includes both labor productivity differences between firms and the necessary condition of positive profits to engage in production. We show that the positive impact of real-wage increases on effective demand forces some firms to stop production because they become unprofitable. Moreover, the increase in effective demand can be impeded by the decrease in the capacity of profitable firms. Therefore, a recovery of economic activity through wage increases reaches its limits when profitable firms are at full capacity. The model also highlights the importance of technical competition and its role in firms’ behavior regarding capital replacement.

DRIVING LABOR PRODUCTIVITY: THE ROLE OF CAPABILITY AND HUMAN CAPITAL IN MALAYSIA’S FOOD MANUFACTURING FIRMS

Productivity gains are not only important for competitiveness but also for other welfare gains. And, importantly, industry structure matters in driving the productive gains. This study examines the labor productivity of food manufacturing firms in Malaysia and the effect of capability and human capital on productivity. The findings show productivity heterogeneity among firms, and as capabilities and human capital grow, productivity gains become much higher. Importantly, it shows that bundles of capability, namely, innovation, information and communication technology (ICT) and marketing as well as human capital become more relevant as firms move to the higher end of the productivity distribution. The findings are robust to different measures of human capital and capabilities. Examining the effects separately indicates that innovation matters the most in driving labor productivity. The coefficient of ICT declines as firms move up the conditional productivity distribution. Likewise, market creating capability of the firms enhances productivity, but the coefficient does not vary across the lower and upper productivity quantiles. The study concludes the implications for persistent labor productivity differences across capabilities and human capital by drawing policy implications.

Effects of Performance-related Pay on Gender Labor Productivity Differences

Effects of Performance-related Pay on Gender Labor Productivity Differences

The Labor Productivity Gap between Formal Businesses Run by Women and Men

ABSTRACT This study analyzes gender differences in labor productivity in the formal private sector, using data from 126 mostly developing economies. The results reveal a sizable unconditional gap, with labor productivity being approximately 11 percent lower among women- than men-managed firms. The analyses are based on women’s management, which is more strongly associated with labor productivity than women’s participation in ownership, which has been the focus of most previous studies. Decomposition techniques reveal several factors that contribute to lower labor productivity of women-managed firms relative to firms managed by men: Fewer women-managed firms protect themselves from crime and power outages, have their own websites, and are (co-)owned by foreigners. In addition, in the manufacturing sector, women-managed firms are less capitalized and have lower labor costs than firms managed by men.

The welfare impact of migration with endogenous cross-border movement: An application to the European Union

In this paper, I examine the welfare impact of migration in a general equilibrium model with endogenous worker location choice. My framework incorporates labor productivity differences across countries, worker heterogeneity in productivity across skill and nativity types, as well as country-pair specific costs of migration. In a series of experiments, I predict the migration response of workers to an expansion or contraction in the number of European Union (EU) member countries. For the case of the United Kingdom (U.K.) leaving the EU, commonly referred to as Brexit, low skilled native-born U.K. workers suffer a drop-in income, whereas high skilled workers experience an increase. This result is driven, in part, by an increase in high skilled immigration to the U.K. from outside the EU, which helps to dampen the loss in income of low skilled workers.

Exploring the recent upsurge in productivity disparities among European regions

AbstractThis paper analyses thse evolution of productivity disparities across 156 European regions in the period 2000–2015. Using regional data, a battery of inequality indexes enables us to assess the extent of regional disparities. After confirming that labour productivity is the main component of income disparities, a dynamic shift‐share analysis is carried out at a 10‐industry level of disaggregation. The study evaluates the relative role of the three components underlying the disparities in regional productivity: changes in the industry mix, and within‐ and between‐industry productivity gaps. The main results can be summarised as follows. First, regional disparities are on the rise again in the EU. Second, most regions are now closer to the average, while a small group of the richest regions are moving further away. Third, the main drivers of productivity disparities are within‐industry differences in labour productivity with regard to the richest regions and, less importantly, the specialisation of the richest regions in more progressive industries. Finally, the net effect of structural change is still making a positive contribution to convergence with the leading regions.

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.

Sustainable Economic Development of Farms in Central and Eastern European Countries Driven by Pro-investment Mechanisms of the Common Agricultural Policy

Improvements in sustainability at the farm level are the basic driver of agricultural sustainability at the macro level. This is a challenge that can only be met by farms which efficiently process inputs into products. The increase in the efficiency of European farms is largely conditioned by measures taken under the Common Agricultural Policy (CAP), especially its second pillar. The purpose of this study was to determine the net effect of pro-investment instruments available under the second pillar of the CAP in selected Central and Eastern European countries. Unpublished Farm Accountancy Data Network (FADN) microdata provided by the European Commission’s Directorate-General for Agriculture and Rural Development (DG AGRI) were used as the source material. The study presented in this paper is unique in that the research tasks are based on unpublished microdata of selected Central and Eastern European farms. The study relied on the Propensity Score Matching approach; the net effect of pro-investment mechanisms was analyzed using productivity and profitability indicators calculated for farms which have been keeping FADN records for a continuous period of no less than 6 years. As shown by the study, structural funds available under the CAP clearly provided an investment incentive for farms. The conclusion from the assessment of changes in the availability of productive inputs is that the beneficiaries reported a greater increase in fixed asset value and in farm area in all countries except for the Czech Republic and Slovakia. The comparative analysis of countries covered by this study failed to clearly confirm that labor is substituted with capital to a significant extent. Every country covered by this study experienced a noticeable negative net effect on both the productivity and profitability of capital. When considering all the countries, the beneficiary group has no clear advantage over the control group in terms of changes in land and labor productivity and profitability (a statistically significant positive effect was recorded for land productivity and profitability in Slovenia). As regards labor, a statistically significant positive net effect (a difference in growth rate between the beneficiary group and the control group) was recorded in Slovenia, but also in Poland, where beneficiary farms reported a greater increment in labor profitability and reduced the negative difference in labor productivity.

Exporting and firm productivity: evidence for Egypt and Morocco

ABSTRACTThis paper investigates the link between exporting and importing activities and firm performance using a rich dataset on Egyptian and Moroccan firms. We test the export premium, self-selection and learning-by-exporting hypotheses using a number of firm characteristics. Our analysis also includes importing activities as a source of learning and considers their effects on productivity changes. A differences-in-differences matching estimator is used to address the endogeneity bias of target variables. The main results for Egyptian firms echo those reported for other countries using firm-level data, namely exporters are larger and more productive than non-exporters. In contrast, Moroccan exporters and non-exporters are strikingly similar. More specifically, no evidence is found of pre or post-entry differences in labour productivity for Moroccan firms.

How big are labour productivity disparities in Poland

The ongoing discussion on inequalities in Poland focuses on household income. It ignores the scale of differences in labour productivity. In order to fill this gap, having combined national accounts and employment data we show that a narrow group of 7.2 million people working in non-financial and financial enterprises account for almost 60% of Polish GDP and 75% of income tax revenues and social security contributions from the private sector. This structure of the economy represents both an opportunity and a threat to growth prospects. Flows of new employees to the enterprise sector from micro-businesses of low productivity or agriculture can considerably increase their productivity. At the same time, however, large differences in productivity, leading to income disparities, create the temptation to tax productive entities more heavily in order to finance transfers to less productive ones, which in turn perpetuates the current structure of the economy.

Inequality and government debt: Evidence from OECD panel data

This paper analyzes how government debt can be caused by changes in the income distribution. Unlike Azzimonti et al. (2014), I distinguish between income inequality induced by differences in labor productivity and income inequality induced by differences in capital income, utilizing the Luxembourg Income Study. Using data for OECD countries, an increase in labor income inequality leads to higher debt level whilst capital income inequality is negatively associated with debt.

Produktivita práce a odměňování v duální ekonomice: role zahraničních investic v České republice

Foreign investment has been an important source of capital formation in transition countries but has caused the division of economies into foreign- and domestic-owned sectors. This paper explores the persistence of dual economy in the Czech Republic as well as the relationship between labour productivity and components used in the income approach to GDP calculation. Analysing the dataset of 20,900 firms operating in the Czech Republic in 2015, the paper presents evidence that higher levels of foreign investment are associated with significant labour productivity and wage differentials. Lower unit labour costs in foreign enterprises are consistent with higher level of investment of foreign-owned firms. Our model shows that differences in the degree of capital intensity are the driving force for the level of unit labour costs (i.e. factors are substitutes concerning the factor payments).

International Differences in Labor Efficiency and Productivity

International Differences in Labor Efficiency and Productivity

Why is Labor Productivity in Israel so Low?

We analyze differences in labor productivity between Israel and a group of small OECD countries. We assume a more general human capital production function and calibrate it using PIAAC surveys, which examine the literacy and numeracy skills of the adult population in the OECD countries. Whereas Israel has more years of schooling, its population has lower measured skills. Using development accounting exercise, we show that once years of schooling and numeracy skills are taken into account, differences in accumulated factors explain more than three-quarters of the gap. This is against a split of 60-40 between accumulated factors and total factor productivity, when these skills are ignored. Additionally, using panel data on 13 OECD countries we show strong positive correlation between physical and human capital per worker at the industry level. A causal interpretation of our estimates implies that closing the gap in skills will indirectly close 18 percent of the gap in physical capital.

Understanding Productivity Practices

The productivity puzzle: The UK’s lacklustre productivity is a challenge at a national and regional level. The South West appears to have a higher density of firms at this lower end “peak” of the productivity distribution and a thinner distribution than other regions in the UK. Average firm-level productivity is seen as an important determinant in the spatial differences in labour productivity between regions. Hence, it is important to take a firm-level perspective. Measurement challenges: Approaches to measuring productivity are controversial. To understand productivity growth, a range of factors must be considered. These include regional differences, ecosystems, market competition, inward investment, sector-specific strengths and the implications of wider regime elements, such as taxes, leading to complex questions about appropriate ways to model and measure productivity. At the firm level, prior research suggests that firms only have a partial understanding of productivity and many experience difficulties in measuring it. Specifically, capacity and capability are lacking for analysing productivity performance data, and few firms could describe how productivity matters for wages. Management practices: There is some evidence that good management practices may have a positive effect on firm-level productivity. Management practices are broadly what an organisation's managers do: how they plan, deliver and utilise the firm's assets, both human and capital. Characteristics of effective management practices found in high productivity businesses relate to employee decision-making and effort, good strategic leadership, skills development and behaviours associated with growth such as exporting, innovating and continuous improvement. Moreover, the ability of managers to embrace and adapt to new technology, engage in innovation, and address processes and elements appears to be important. External support: Support services might benefit firms, increasing the ‘diffusion’ of best practice, equipping businesses with the necessary tools to become more productive. However, barriers to uptake of support services include doubts over the benefits and value of support versus the cost, relationship failure due to the lack of trust in the support and concerns that the assistance will not be appropriate. The concept of business ecosystems is relevant to understand beneficial systemic conditions found in such ecosystems, relating to networks of entrepreneurs, leadership, finance, talent, knowledge and support services.