Sectoral Labor Productivity Research Articles

The Global Economic Recovery From COVID-19 Vaccinations

The analysis examines the COVID-19 pandemic’s economy-wide global effects, assessing the impact on gross domestic product (GDP) through reduced labor supply and productivity in diverse sectors. Utilizing a Computable General Equilibrium model from the Global Trade Analysis Project database, the results highlight the pronounced influence on Light and Heavy manufacturing due to disrupted global supply chains. The vaccination’s effectiveness in economic recovery is emphasized, indicating increased labor participation and productivity. The study underscores vaccine disparities among developing nations, affecting global economic resurgence. Overall, it stresses the interconnectedness of COVID-19’s impact on national GDP, the manufacturing sectors, and the crucial role of vaccination in driving economic activity and global recovery.

Productivity Paradox in Africa: Does Digitalization Foster Labor Productivity in African Economies?

AbstractHow the advancement of information and communications technologies (ICT) and digitalization affect labor productivity is subject of an ongoing debate. While parts of the literature find the expected positive effects, other studies have found no effect, resulting in the so-called productiviy paradox. As most of the studies have focused on economically advanced economies such as OECD countries, evidence for less developed economies has been sparse. We use a digitalization composite index from a balanced panel of 40 Sub-Saharan African (SSA) economies, using data from 2006 to 2021, to assess the effect of digitalization on aggregate labor productivity in SSA economies. We employ generalized least squares (GLS) and system generalized methods of moments (GMM) methods to capture the effects of digitalization on labor productivity levels in agriculture, manufacturing, and service sectors. Our results show a weak association between digitalization and overall labor productivity. However, when sectors are analyzed separately, digitalization has a positive effect on labor productivity in agriculture and manufacturing sectors, whereas we find evidence for the productivity paradox in the service sector, with even a negative effect of digitalization on labor productivity.

Understanding the key determinants of Fiji's renewable energy

In this research, we reassess the interplay between renewable energy consumption and key economic indicators in Fiji, using data spanning 1991 to 2020. Applying the ARDL bounds test for cointegration, we detect a long-run correlation among renewable energy use, service sector labor productivity, urbanization, ICT exports, and unemployment. Our analysis reveals significant long-term effects: higher labor productivity and unemployment rates encourage renewable energy consumption, whereas urbanization and ICT exports tend to decrease it. At the same time, short-term observations indicate that unemployment is negatively correlated with renewable energy adoption. Our study contributes fresh perspectives on sustainable growth amidst climate change for island countries like Fiji.

Determinants of Labor Productivity of Turkish Manufacturing Sectors: The Role of Global Value Chain Participation

Purpose: This paper investigates the determinants of labor productivity of Turkish manufacturing sectors by taking into account both the global value chain (GVC) participation and the research and development (R&D) expenditure for the period of 1995-2018. Methodology: To analyze the determinants of labor productivity in Turkish manufacturing sectors, we specify the labor productivity model and estimate this empirical model by the Ordinary Least Squares (OLS) and Two-Stage Least Squares (2SLS) methods. Findings: Our estimation results indicate that while simple forward GVC participation enhances the labor productivity of Turkish high-tech manufacturing sectors if they trade with developing countries, complex forward GVC participation increases productivity regardless of trading partners. For low-tech sectors, there is no significant impact of GVCs or R&D on productivity. There is no significant impact of backward GVC participation and sectoral R&D intensity on labor productivity. These significant results provide strong evidence for the importance of deeper involvement of high-tech sectors in GVCs for higher sectoral productivity. Given the strong heterogeneity in terms of sectors and trading partners, specific policies should be targeted to benefit from the productivity gains of the global value chains. Originality: This study contributes to the current studies by focusing on disaggregated measures of GVC participation indices and enlarges the empirical analysis by considering the heterogeneity in trading partners (developed and developing trading partners).

Catch-Up Growth and Inter-industry Productivity Spillovers: Evidence from Trade Data

Abstract Where and when does export-led growth work? This paper estimates the importance of inter-industry productivity spillovers for the export-led growth of developing countries. My empirical strategy is based on a standard quantitative trade model that features sector-level gravity in trade flows. Applying the framework to four decades of trade data, I find clear evidence of spillovers, which are larger for skill-intensive sectors. The estimates imply that patterns of sectoral specialization play a quantitatively important role in accounting for the slow convergence of labor productivity in tradable sectors. Quantitative exercises suggest that export-led growth works for poorer countries with an initial comparative advantage in manufacturing, as these countries can use foreign demand from richer countries to reallocate labor towards sectors with high spillovers.

The determinants of labour productivity in the Eastern Cape Province: A sectoral and industry analysis

ABSTRACT The purpose of this study is to examine the determinants of labour productivity in the Eastern Cape. Furthermore, the study estimates the determinant of labour productivity from a sectoral and industry perspective. The technique employed for the empirical analysis is the ARDL bounds test. The empirical results highlight that investment in ICT, health and GDP growth are the crucial determinants of total labour productivity in the Eastern Cape. The sectoral analysis shows that primary sector labour productivity is driven by human capital and investment in ICT. Trade is the most important factor explaining labour productivity in the secondary sector while the tertiary sector is driven by R&D expenditures and ICT investment. The industry analysis revealed results similar to those of the sectoral analysis to some extent. The results imply that the shift to a knowledge-based economy is crucial for the Eastern Cape.

Employment protection and labour productivity growth in the EU: skill-specific effects during and after the Great Recession

Does employment protection affect sectoral productivity growth differently during crises and recovery periods? This paper sheds light into this question by investigating the relationship between employment protection legislation (EPL hereafter) and sectoral labour productivity growth in the EU in the context of the Great Recession. We consider the crisis and recovery periods, evaluate the relevance of both levels and changes in EPL for productivity growth, and explore the conditioning role played by sectoral differences in terms of cumulativeness of knowledge as well as the skills of the labour force, captured by different levels of education. We find that stricter labour protection reduces labour productivity growth in sectors with a large share of workers with tertiary education, whereas this effect is negligible or positive in sectors where workers with secondary or only primary education are more prevalent (such as agriculture, mining and quarrying). We attribute this to a more intensive labour hoarding in the former, as EPL strengthens labour hoarding in sectors that rely on firm-specific knowledge accumulation and skilled human capital that are difficult to substitute with physical capital. Whereas it is simple to dismiss (and to find later) unskilled employees. They not only can be substituted more easily with capital, but also the costs of their firing are lower, they are overrepresented among workers holding temporary contracts, and they might be unequally informed and able to exercise their rights. This leads to low (if any) labour hoarding and little impact of EPL on labour productivity in such sectors. We also document that the negative effect is prominent only during the crisis, and an increase in the stringency of EPL over an extended period stimulates employers to substitute labour with investments in physical and knowledge capital.

Industrial policy and labour productivity growth in Africa: does the technology choice matter?

The persistent gaps in African sectoral labour productivity and the disappointing growth in the manufacturing and service sectors have revived interest among academics and policymakers. In search of ways to boost labour productivity, this study explores how the technology choice as a proxy for industrial policy can affect labour productivity growth. First, I identify the different sources of growth with the decomposition method of shift–share analysis and a recent dataset from 1960 to 2017 of nine sectors. Then I investigate the impact of comparative advantage development strategy on growth components (within effects and structural effects). The shift and share decomposition analysis results suggest a changing role of growth components. While the structural change effect is driven by the “static gains” which still plays an important role, the within effect has been more prevalent during the MDGs and SDGs period. The empirical results indicate that defying comparative advantage hinders the within effect component mitigated by a weak and positive dynamic effect component. The evidence emphasises the design of industrial development based on the comparative advantage in SSA, complemented with policies and strategies aiming at increasing labour productivity in the agriculture sector due to its large employment share.

The Effect of Educational Mismatch on The Turkish Manufacturing Industry

This article explores educational mismatch for twenty-three different Turkish industrial sectors using all available household surveys from 2004 to 2015. Our aim is to first evaluate the educational mismatch level in the Turkish industrial sectors and then analyze its effects on the sectoral total factor productivity, labor productivity, and wages. For the sectoral total factor productivity, our dynamic panel data estimations suggest that the modal value of education increases the growth rate of total factor productivity. Therefore, the widespread existence of educational mismatch implies the efficiency loss in Turkish manufacturing sector for the period of 2004-2015. For the sectoral labor productivity, the modal value of education and the mean value of over-education increases labor productivity whereas the mean value of under-education decreases it. These results clearly imply that the human capital theory overcomes the job satisfaction theory for the Turkish industrial industry because the mean years of over-education increases the sectoral labor productivity. For the sectoral wages, the mean value of over-education raises wages.

Features of spatial and structural transformations of the economy: European experience and Ukrainian realities

The article focuses on the study of the structural features of the economy of the EU member states and Ukraine. Labor productivity and capital productivity in a sectoral section are analyzed. In particular, changes in the dynamics of labor and capital productivity during 2014-2021 are examined. Based on the results, the sectors that are leaders and can act as determinants of the productive capacity of Ukraine and its regions are identified. The article reveals that the most intensive growth of labor productivity is recorded in such sectors as temporary accommodation and organization of food, as well as information and telecommunications. Capital productivity under the prevailing instability of the dynamics of this indicator is recorded only in construction and in information and telecommunications. The regions of Ukraine are ranked and grouped according to the intensity of labor productivity growth. The comparative analysis of the rates of growth (decline) of capital productivity in the sectors of the economy of Ukraine is carried out. It shows that the growth rate of labor productivity exceeds that of capital productivity. Based on the assessment of the ratio of wage growth rates and labor productivity in the economic sectors, the hypothesis regarding the predominance of labor productivity growth rates over wage growth rates in the majority of the economic sectors is verified. Drivers contributing to the growth of the productive capacity of economic sectors are characterized. The main strategic priorities of the structural transformations of the domestic economy in wartime and post-war recovery are determined, in particular regarding the development of the military-defense complex, which will ensure the long-term political and economic security of Ukraine and the development of industrial and innovative structural elements of the country’s economic system. The article emphasizes the need to create and develop a national innovation platform, which should be a component of the innovation market and the formation of the state system of legal protection of intellectual property, the demands for reform of which were put forward in the process of deepening European integration reforms.

Informality and Competition

Based upon the changes of labor productivity for the economy decomposed by sectors and activities, this paper proposes three hypotheses on the relationship between the informal sector and competition for Peruvian economy in the period 2007-2018. The first one postulates that there might exist product market segmentation between formal and informal firms. The second postulates that the effects of the PTAs on the changes of labor productivity in activities and sectors have been diverse and unclear. The last and third hypothesis postulates that labor productivity changes in Peru and its within and reallocation components have been associated with the fluctuations and the rate of growth of the GDP and the terms of trade. These associations are consistent with the primary- export structure of the Peruvian economy.

Labor productivity in the agriculture, structural shifts and economic growth in the Central and Eastern European countries

Purpose. In our article, we assess the scope and directions of changes in agricultural labor productivity compared to other sectors of the economy.
 Methodology / approach. For our survey we choose 15 countries: (і) EU countries – Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia, as well (іі) post-Soviet European countries – Ukraine, Moldova, Belarus, russia and also (ііі) Albania for period 1996–2019. We use an empirical methodology designed to analyze structural decomposition of labor productivity into the growth effect within the sector and structural dynamic and static effects, often called ‘shift-share analysis’. We analyze process of convergence of sectoral labor productivity and its impact on economic growth.
 Results. Labor productivity grows in the agricultural sector of the economy at the fastest rate, on average by almost 12 % per year. The growth effects within the industry takes a dominant position in all sectors of the economy in the countries of Central and Eastern Europe and its share is on average 88.5 %, and the structural effects are as follows: the dynamic effect is almost 1%, the static effect is 10.4 %. We have confirmed that the agricultural sector is gaining weight in the economic growth of the countries of Central and Eastern Europe, the influence of the service sector is increasing, although together they do not exceed the influence of the growth of value added in industry.
 Originality / scientific novelty. For the first time we have used the methodology of decomposition of labor productivity growth into three effects: growth, dynamic and static ones for the period before the financial crisis 2008 and after the crisis for 15 countries of Central and Eastern Europe. Using panel GLS estimator with fixed effects we estimate the impact of labor productivity on economic growth in different sectors for 1991–2020 period. 
 Practical value / implications. The main results of the study can be used for elaboration of effective economic policy in agriculture development in Central and Eastern European countries; for identification of structural shifts in labor productivity in different sectors of the economy before and after the financial crisis; for estimation of the level of convergence between different sectors of the economy; determining main factors of increasing value added in agriculture in Ukraine and other Central and Eastern European countries; implementation structural changes in economy in the period of crisis.

Sectoral Productivity – Allocation of FDI Nexus in Bulgaria after the 2008-2009 Global Crisis

Studies of foreign direct investment in Bulgarian economy have had a decades-long history since the beginning of the transition to a market economy. This subject was particularly topical in the early transition period, when foreign investments were expected to be a major driver of the recovery and renewal of Bulgarian economy. Thirty years later, the relevance of this topic has not diminished, given the extraordinary degree of globalization of the world business into which Bulgarian economy must successfully integrate. The main goal of the current study is to present preliminary results of a statistical analysis of the dependence of sectoral labor productivity on the level of foreign direct investment allocated to various sectors of Bulgarian economy. For this purpose, two basic specifications of econometric models are built, adapted for estimation using panel data for the 2008-2019 period. The models are estimated using annual data for the sectors defined in the framework of the International Standard Industrial Classification of economic activities (ISIC-2008). Statistically significant results are obtained on various effects of the sectoral allocation of FDI in Bulgarian economy.

Drivers of productivity change in global value chains: Reallocation vs. innovation

We investigate the role of technological improvement and market share reallocation in determining global changes in sectoral labor productivity. Contrary to previous work that neglects dependencies between suppliers in global value chains, we account for input linkages that impact both channels of productivity improvement. Using sector-level data from the World Input–Output Database, we show that reallocation between countries has a larger effect on productivity change than innovation within countries.

Sources of transport sector labor productivity performance in industrialized countries: Insights from a decomposition analysis

This study examines patterns and sources of growth in the transport sector's labor productivity across 13 industrialized countries over the period 2000–2015. Through decomposition analysis – specifically, the growth accounting method and industry origin analysis – the study makes three principal findings. First, total factor productivity growth plays a crucial but often underleveraged role in driving the sector's growth and catch-up on labor productivity. Second, digital transformation – especially investment in software and database assets – is a significant source of the sector's labor productivity growth and catch-up, while innovation-related capital has a complementary effect. Third, subsector-level labor productivity improvement is the major driver of the sector's overall labor productivity growth, while the growth contribution of labor reallocation among subsectors is insignificant. The article concludes with a discussion of policy insights and implications.

Uneven Development of the Spatial Economy of the Russian Federation and Differentiation of Growth Factors: Period 2016–2019

The issues of spatial differences in the level of socio-economic development of Russian macroregions, are discusses in the article. Authors analyze the causes and trends of changes in the spatial structure of macroeconomic indicators by federal districts and evaluate the main factors of regional growth and the potential for further development of the federal districts of the Russian Federation. The object of the study is the spatial economy of Russia in the period 2016–2019, both in the context of federal districts and in the context of the European and Asian parts. The European part of the Russian Federation includes the Central Federal District, the Northwestern Federal District, the Southern Federal District, the Northwestern Federal District, the Volga Federal District and the Ural Federal District without the Tyumen Region. The Asian part of the Russian Federation consists of the Tyumen region, the Siberian Federal District and the Far Eastern Federal District. The main goal of this work is to analyze the growth factors of Russian regions in the period 2016–2019. The research tools include methods for factorial decomposition of increments into quantitative and qualitative features, methods for analyzing structural changes. The paper shows the impact of price and volume changes on GRP growth, the impact of changes in the number of employees and total labor productivity on volume growth, the impact of changes in sectoral labor productivity and the structure of employees on the growth of total labor productivity. The paper also reflects the reasons for the uneven spatial development of the country and presents the contributions of industries to regional growth.

Regions’ economic fitness and sectoral labor productivity: Evidence from Turkey

AbstractEconomic fitness is a nonlinear method for measuring countries’ and regions’ economic complexity. This study aims to measure the economic complexity of regions and its impacts on sectoral labor productivity in Turkey. By developing and employing a regional economic fitness index, the study addresses the agricultural, industrial, and service sectors at the NUTS‐2 level to more effectively analyze regions’ overall labor productivity. Our findings show that economic fitness positively affects regions’ overall labor productivity, and this positive effect mostly stems from the industrial sector. Furthermore, our findings highlight that there is no relationship between the regional fitness index and the agricultural sector.

New Evidence on Sectoral Labor Productivity: Implications for Industrialization and Development

New Evidence on Sectoral Labor Productivity: Implications for Industrialization and Development

Peningkatan Kinerja Melalui Insentif Pegawai Pada Balai Pelatihan Tenaga Kerja Dan Transmigrasi (BPTT) Jambi

Incentives at training of Balai Pelatihan Tenaga Kerja dan Transmigrasi (BPTT) Jambi in the past five years is growth. The average total absenteeism without explanation in the past five years as much as 17,80 %. Average of performance growth amounted to 10,64%. Indicators of incentives that cooperation, identity, competence, as well as various forms of engagement system allowances, indicators of motivation is, engagement, commitment, satisfaction and turn over, and indicator of perfomanceis quality, quantity, timeliness, cost effectiveness, the need for supervision, and interpersonal impact. Analyst tools with multiple linear regression. Balai Pelatihan Tenaga Kerja dan Transmigrasi (BPTT) Jambi is one of the technical implementation elements which organizes and is directly responsible to the Head of the Social Service Office of Manpower and Transmigration in Jambi Province. Balai Pelatihan Tenaga Kerja dan Transmigrasi (BPTT) Jambi Carry out skills training for job seekers and training in increasing labor productivity in all business sectors in government agencies, BUMN, BUMD, and Cooperatives, as well as conducting training for transmigrants and / or prospective transmigrants. Based on the table above, it is known that the value of the correlation coefficient (R) is 0.585, then the correlation between Performance (Y) through the Incentive variable (X) is 0.585, this means a close relationship because the value is close to 1. SPSS 20 result obtained equation Y= 1,014 + 0,567. From the equation it can be said that incentives variabels can be used as a tool to predict the performance of employees at Balai Pelatihan Tenaga Kerja dan Transmigrasi (BPTT) Jambi. Based on the value of the coefficient of determination r2 is 0.342, it means that there is a fairly close positive relationship between the variable Performance Improvement (Y) which influences through the Incentive variable (X). This figure states that the incentive variable (X) is able to explain the Performance variable (Y) at Balai Pelatihan Tenaga Kerja dan Transmigrasi (BPTT) Jambi by 34.2% while 65.8% is influenced by other variables outside the modeling. It is suspected that the increase in employee performance through incentives at the Balai Pelatihan Tenaga Kerja dan Transmigrasi (BPTT) Jambi with the following discussion:The effect of incentive on employee performance evidenced from tcount> ttable (4.141 > 2.034) and a significance value of < 0.05 (0.000 < 0.05) Thus, H0 is rejected, so the incentives partially affect the performance improvement. The value of tcount is positive, meaning that if the incentives increase, the performance will also increase.

ICT and Productivity Growth Within Value Chains

Growth accounting has documented an important contribution of information and communication technology (ICT) capital deepening to sectoral labor productivity growth during the late 1990s, especially for the knowledge‐intensive services that are used to an important extent as intermediate inputs to other sectors. Our approach traces labor productivity growth not within sectors but within value chains of final products. A main result is that more than half of the productivity gains related to ICT capital deepening for manufactured goods are contributed by upstream industries, mostly by knowledge‐intensive services. For a number of countries, similar magnitudes of upstream contributions of ICT capital deepening are observed for ICT products and for services that are not knowledge‐intensive. The major part of these contributions is domestic rather than foreign. Moreover, the high sectoral growth in total factor productivity (TFP) in the ICT sector contributes only moderately to effective TFP growth in non‐ICT value chains.