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Productivity, Structural Change in Employment and Economic Growth

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  • Enrique R. Casares

    (Universidad Autónoma Metropolitana)

Abstract

We develop an endogenous growth model with two sectors, manufacturing and non-manufacturing. The manufacturing sector is the source of the balanced productivity growth. We study how the economy responds to shifts in sector-specific productivity. Thus, when the sector-specific productivity in the manufacturing sector increases, we find that the fraction of labor employed in the manufacturing sector follows an inverted V curve, and that the growth rate increases. Thus, the model captures approximately the documented pattern of development for the share of manufacturing employment, a bell shape over time. When the sector-specific productivity in the non-manufacturing sector increases, the growth rate remains unchanged because the non-manufacturing sector is the non-learning sector.

Suggested Citation

  • Enrique R. Casares, 2007. "Productivity, Structural Change in Employment and Economic Growth," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 22(2), pages 335-355.
    • Handle: RePEc:emx:esteco:v:22:y:2007:i:2:p:335-355
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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/141/143
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    References listed on IDEAS

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    Cited by:

    1. Martin Zagler, 2009. "Economic growth, structural change, and search unemployment," Journal of Economics, Springer, vol. 96(1), pages 63-78, January.

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    More about this item

    Keywords

    manufacturing sector; learning by doing; productivity; structural change; growth;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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