Structural Change and Productivity Growth

Productivity Growth Decomposition

  • Three separate contributing effects for labor productivity growth are presented:
    • the
      Within sectorIt captures the productivity growth within each of the seven broad sectors.
      (WS) effect,
    • the
      Static structural reallocation effectIt captures the contribution of structural change towards sectors with higher productivity levels.
      (SSRE) effect, and
    • the
      Dynamic structural reallocation effectIt captures the contribution of structural change towards sectors with higher productivity growth rates.
      (DSRE) effect.
  • The latter two effects add up to the total structural change effect on labor productivity growth.
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