Productivity and Employment in a Developing Country: Some Evidence from Korea (original) (raw)
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Estimates of Labor and Total Factor Productivity by 72 industries in Korea (1970-2004)
As Krugman (1994), Young (1994), and Lau and Kim (1994)'s studies showed, the East Asian economic miracle may be characterized asinput-led' growth. However, both the stagnation in investment and the decrease in average working hours combined with decrease in the fertility rate require a productivity surge for a renewed sustainable growth in East Asia. The purpose of our study is to identify the sources of economic growth based on a KLEMS model for the Republic of Korea which experienced a financial crisis in 1997 after joining OECD. We report estimates of KLEMS inputs and gross output in Korea based on preliminary dataset of 72- industry classification following EU KLEMS project guidelines. We also provide estimates of 72 industry-level labor productivity and total factor productivity. We have found that Korea's catch-up process with industrial nations in its late industrialization has been predominantly input-led and manufacturing based as documented in Timmer(1999) ...
Estimates of Labor and Total Factor Productivity by 72 Industries in Korea (1970–2003)
Productivity Measurement and Analysis, 2009
As Krugman (1994), Young (1994), and Lau and Kim (1994)'s studies showed, the East Asian economic miracle may be characterized as `input-led' growth. However, both the stagnation in investment and the decrease in average working hours combined with decrease in the fertility rate require a productivity surge for a renewed sustainable growth in East Asia. The purpose of our study is to identify the sources of economic growth based on a KLEMS model for the Republic of Korea which experienced a financial crisis in 1997 after joining OECD. We report estimates of KLEMS inputs and gross output in Korea based on preliminary dataset of 72industry classification following EU KLEMS project guidelines. We also provide estimates of 72 industry-level labor productivity and total factor productivity. We have found that Korea's catch-up process with industrial nations in its late industrialization has been predominantly input-led and manufacturing based as documented in Timmer(1999) and Pyo (2001). We have also found that TFP growth has been positively affected by the growth of labor productivity and output growth. However, since its financial crisis in December 1997, the sources of growth seem to have switched to TFP-growth based and IT-intensive Service based. But lower productivity in service industries due to regulations and lack of competition seems to work against finding renewed sustainable growth path.
Is output growth of Korean manufacturing firms productivity-driven?
Journal of Asian Economics, 2003
This paper examines the sources of output growth and total factor productivity (TFP) growth of four selected South Korean manufacturing industries from 1980 to 1994. Unlike previous studies, this study is enriched by the use of firm level data within each industry and the application of the random coefficient frontier model. Empirical results show that output growth in the manufacturing industries is increasingly productivity-driven. But the varying sources of TFP growth (i.e. technical progress and gains in technical efficiency) within the industries present an urgent need to reexamine the effect of government policies and other factors to formulate specific policies for sustainable TFP growth. #
iranian economic review, 2014
In this paper,using a structural decomposition analysis (SDA) and the latest available input-output tables we investigate the sources of labor productivity growth in Norway, South Korea and Iran. Then, the contribution of each source in the growth of labor productivity is discussed. The results show that among six factors, value added coefficient is the most influencing factoracross all three countries regardless of the level of development. In contrast, labor input coefficient shows the smallest effect on labor productivity growth.
The purpose of our study is to identify sources of economic growth for the Republic of Korea, which experienced a financial crisis in 1997 after joining the OECD. We provide estimates of output, input, and productivity based on the newly constructed Korea Industrial Productivity (KIP) database following EU KLEMS project guidelines. We find that Korea's catch-up process with industrial nations during its period of late industrialization has been predominantly input-led and manufacturing-based. However, following the financial crisis in December 1997, the Korean economy growth seems to have shifted to productivity-led growth. However, lower productivity in the service industries seems to work against a renewed sustainable growth path.
Productivity Growth and Employment: Theory and Panel Estimates
2004
Theoretical predictions of the effect of TFP growth on employment are ambiguous, and depend on the extent to which new technology is embodied in new jobs. We estimate a model for employment, wages and investment with an annual panel for the United States, Japan and Europe and find that TFP growth increases employment. For the United States TFP growth explains the trend change in unemployment. We evaluate the model and find that creative destruction plays no part in aggregate unemployment dynamics. The model can explain up to half of the estimated impact of growth on unemployment.
Journal of Productivity Analysis, 2010
we have adopted a gross output model rather than a value added model of relative TFP analysis. We have found that the cyclical variation of productivity growth plays a dominant role in the decomposition effects before and after the 1997 financial crisis in Korea. Productivity growth is modest before the crisis and strong after the crisis owing to the recovering market efficiency. There is the likelihood that the productivity growth of stayers during the post-crisis period was significantly higher than new entrants. The net entry effect is found to be more sensitive in small business and export-based firms than in large business and domestic market-based firms. Our findings suggest that Korean firms have recovered a modest level of technical change after its severe financial crisis owing to the improvement of management transparency and the build-up of market efficiency during the IMF-mandated restructuring process. But since the entry effect is estimated to be still negative in Manufacturing and the exit effect is negative in Service sector after the crisis, the Korean economy has not fully recovered its metabolism in the post-crisis period and still lacks a creative destructive process to resume another round of sustainable growth path.
Do Technology Shocks Lower Hours Worked? Evidence from the Japan Industrial Productivity Database
2013
We examine the response of productivity and hours worked to technology and non-technology shocks using the Japan Industrial Productivity (JIP) Database. We find that, at the aggregate level, (1) hours worked increase in response to positive technology shocks both in the manufacturing and the nonmanufacturing sectors, which is consistent with the conventional real-business-cycle model; and (2) productivity decreases in response to positive non-technology shocks. At the two- and three-digit industry levels, we find that the correlation between productivity and hours worked in response to technology shocks still tends to be positive in the manufacturing sector while negative in the nonmanufacturing sector. Further, decomposing non-technology shocks into permanent changes in the relative size of industries and industry-specific shocks shows that the negative productivity response to non-technology shocks originates from industry-specific factors.