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Structural Transformation and Labor Productivity in Brazil

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  • Marcolino, Marcos Araujo
  • Costa, Daniela

Abstract

This paper examines the labor reallocation across agriculture, manufacturing, and services, and their impacts on aggregate labor productivity in Brazil from 1950 to 2010. We use a multisector model that features nonhomothetic preferences with constant elasticity of substitution and wedge distortions. This framework allows us to decompose the drivers of labor reallocation into supply-side, demand-side, and wedges. For the 1950-2010 period, demand-side effects were responsible for most of the reallocation of labor away from agriculture towards manufacturing and services. On the other hand, if we focus only on the 1980-2010 sub-period, supply-side drivers become the major determinant for labor reallocation.

Suggested Citation

  • Marcolino, Marcos Araujo & Costa, Daniela, 2022. "Structural Transformation and Labor Productivity in Brazil," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 75(4), February.
    • Handle: RePEc:fgv:epgrbe:v:75:y:2022:i:4:a:81758
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    1. Cai, Wenbiao, 2015. "Structural change accounting with labor market distortions," Journal of Economic Dynamics and Control, Elsevier, vol. 57(C), pages 54-64.
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    6. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 2001. "Beyond Balanced Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(4), pages 869-882.
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