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Unconditional convergence of labor productivity in the service sector

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  • Kinfemichael, Bisrat
  • Morshed, A.K.M. Mahbub

Abstract

Using disaggregated service sector data for 95 countries, we found unconditional convergence in real labor productivity for the service sector. The aggregate service sector yields a large unconditional convergence coefficient of −0.035; we also found the presence of unconditional convergence for individual sub-sectors. Since the service sector now faces both domestic and international competition, the presence of unconditional convergence in labor productivity in this sector is not surprising. Unlike Rodrik (2013), we found evidence of unconditional convergence for aggregate labor productivity in the most recent data available, and the convergence of the service sector productivity appears to be a crucial component of this reversal.

Suggested Citation

  • Kinfemichael, Bisrat & Morshed, A.K.M. Mahbub, 2019. "Unconditional convergence of labor productivity in the service sector," Journal of Macroeconomics, Elsevier, vol. 59(C), pages 217-229.
    • Handle: RePEc:eee:jmacro:v:59:y:2019:i:c:p:217-229
    DOI: 10.1016/j.jmacro.2018.12.005
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    4. Kose, M. Ayhan & Ohnsorge, Franziska, 2023. "Slowing Growth: More Than a Rough Patch," CEPR Discussion Papers 18226, C.E.P.R. Discussion Papers.
    5. AlKathiri, Nader, 2024. "Drivers of unconditional income convergence," Economics Letters, Elsevier, vol. 234(C).
    6. Tschirley, David & Reardon, Thomas, 2016. "Impact on Employment and Migration of Structural and Rural Transformation," Food Security International Development Working Papers 245895, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    7. Ronny Correa-Quezada & Lucía Cueva-Rodríguez & José Álvarez-García & María de la Cruz del Río-Rama, 2020. "Application of the Kernel Density Function for the Analysis of Regional Growth and Convergence in the Service Sector through Productivity," Mathematics, MDPI, vol. 8(8), pages 1-20, July.
    8. Lin, Boqiang & Zhou, Yicheng, 2021. "How does vertical fiscal imbalance affect the upgrading of industrial structure? Empirical evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 170(C).

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    More about this item

    Keywords

    Unconditional convergence; Labor productivity; Service sector;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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