A Tale of Two Sectors: Why is Misallocation Higher in Services than in Manufacturing? (original) (raw)

Productivity, Misallocation and the Labor Market

2012

A wealth of empirical research has demonstrated tha t reallocation of inputs and outputs across establishments with different pr oductivity levels significantly contributes to aggregate growth. In t his paper we estimate the extent of labor misallocation in Chilean manufactur ing plants over the 19792007 period; that is, the potential gains from this reallocation process. We find that labor productivity heterogeneity has increased over the period under analysis. We show that this finding is correlated w ith the rise in the volatility of shocks that resulted from developments in both, the conduct of monetary policy and in the energy market. We also find that although the reallocation process is productivity enhancing, its relative inc idence had diminished by the end of the period. Finally, we estimate the aggrega te manufacturing losses associated to this dispersion by examining the prod uctivity gains that would result from reallocating workers from the least pro ductive plants. Th...

Tertiarization and Human Capital: Do They Matter for Growth? Insights From Portugal

Annals of the Alexandru Ioan Cuza University - Economics, 2014

We investigate the existence of causality among sectoral productivity, services sector expansion, human capital, and aggregate productivity over the period 1970-2006 in the Portuguese economy taking into account the contribution of services sub-sectors with different potential for productivity improvements, market and non-market services. The main aim is to examine whether the increasing tertiarization of the Portuguese economy constituted an obstacle or an opportunity for its aggregate productivity performance and if the expansion of the services sector is related to human capital availability, based on the former disaggregation of the services sector. The evidence suggests bidirectional causality between sectoral and aggregate productivity, with sectoral employment shares and human capital not revealing themselves as relevant for the explanation of the other variables nor being influenced by them. Across services categories, non-market services seem to be the most influential one,...

Essays on Productivity and Structural Change within the Services Sector

2020

My PhD thesis consists of three chapters. The first chapter revisits the results in Bernard and Jones (1996) that argue that a group of 14 OECD countries does not converge in the manufacturing sector. For an updated dataset I show that the non-catch-up in the manufacturing sector result still prevails for the standard estimators, but when I allow for parametrical heterogeneity it is overturned. I conclude that the estimators allowing for parametrical heterogeneity, for example MG and CDMG, can deal with the cross-country level measurement issues inherent for the manufacturing sector and reverse the pathological results about the convergence. The second chapter focuses on the role of the services sector for aggregate productivity growth and cross-country productivity differences. I show that, because of the substitutability between high- and low-productivity growth services sectors (progressive and stagnant services sectors), structural change would not take down aggregate productivi...