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Employment, Capital, And Productivity Dynamics: Evidence From The Manufacturing Sector In Uruguay

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  • CARLOS CASACUBERTA
  • GABRIELA FACHOLA
  • NéSTOR GANDELMAN

Abstract

This paper studies the employment, capital and productiviy dynamics in the uruguayan manufacturing sector between 1982 and 1995. over this period in Uruguay there were significant changes in trade policy and in the institutional setting of employment negotiations. Using a sample of establishments, creation, desturction, net creation and reallocation rates for employment and capital were computed, along with estimations fo average employment, capital and total factor productivity. Creation and destruction rates for labor and capital were found to be relatively high and pervasive over time, industry sectors, size and age. Exits and entries explain a sizeable part of job and capital destruction rates. Larger firms although are not those that create most jobs, are the ones with the higher net creation rates. Decomposing excess reallocation rates for emplyment and capital we found that most of the adjustment is due to movements "within" rather than "between" sectors. Thus, the high reallocation rates are probably linked to establishment level heterogeneity rather than aggregate shocks. The uruguayan manufacturing in order to face the trade barrier reductions process performed a technological conversion that implied a substitution of labor for more capital intensive technologies. Such technologies brought about a progressive and systematic increase in labor and total factor productivity.
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Suggested Citation

  • Carlos Casacuberta & Gabriela Fachola & Néstor Gandelman, 2011. "Employment, Capital, And Productivity Dynamics: Evidence From The Manufacturing Sector In Uruguay," The Developing Economies, Institute of Developing Economies, vol. 49(3), pages 266-296, September.
    • Handle: RePEc:bla:deveco:v:49:y:2011:i:3:p:266-296
    DOI: j.1746-1049.2011.00135.x
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    Cited by:

    1. Peluffo, Adriana & Silva, Ernesto, 2018. "Innovation and Employment," Conference papers 332986, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Adriana Peluffo, 2011. "Integración regional y difusión de tecnologí­a: el caso uruguayo," Documentos de Trabajo (working papers) 11-10, Instituto de Economía - IECON.
    3. Carlos Casacuberta & Néstor Gandelman, 2015. "Productivity, Exit, and Crisis in the Manufacturing and Service Sectors," The Developing Economies, Institute of Developing Economies, vol. 53(1), pages 27-43, March.
    4. Pablo Fajnzylber & J. Luis Guasch & J. Humberto López, 2009. "Does the Investment Climate Matter? Microeconomic Foundations of Growth in Latin America," World Bank Publications - Books, The World Bank Group, number 6300.
    5. Carlos Casacuberta & Néstor Gandelman, 2012. "Protection, Openness, and Factor Adjustment: Evidence from the Manufacturing Sector in Uruguay," Economic Development and Cultural Change, University of Chicago Press, vol. 60(3), pages 597-629.
    6. Néstor Gandelman & Verónica Alaimo & Marcelo Olarreaga & José Luis Guasch & Daniel Lederman & Carlos Casacuberta & Ana María Oviedo & J. Humberto López & Inessa Love & Guido Porto & Pablo Fajnzylber &, 2009. "Does the Investment Climate Matter?: Microeconomic Foundations of Growth in Latin America," IDB Publications (Books), Inter-American Development Bank, number 60058 edited by José Luis Guasch & J. Humberto López & Pablo Fajnzylber, February.
    7. World Bank, 2007. "Economic Performance in Latin America and the Caribbean : A Microeconomic Perspective," World Bank Publications - Reports 7857, The World Bank Group.
    8. Gandelman, Néstor & Alaimo, Veronica & Olarreaga, Marcelo & Guasch, José Luis & Lederman, Daniel & Casacuberta, Carlos & Oviedo, Ana María & López, J. Humberto & Love, Inessa & Porto, Guido & Fajnzylb, 2009. "Does the Investment Climate Matter?: Microeconomic Foundations of Growth in Latin America," IDB Publications (Books), Inter-American Development Bank, number 359, November.

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