Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries

Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries

Using firm-level survey data on registered private firms collected by the World Bank's Enterprise Surveys, this paper compares the level of labor productivity in 22 upper-middle-income countries and 11 high-income countries for which comparabl...

Full description

Bibliographic Details
Main Authors: Amin, Mohammad, Islam, Asif, Khalid, Usman
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2019
Subjects:
LABOR PRODUCTIVITY
HUMAN CAPITAL
EDUCATIONAL ATTAINMENT
Online Access:http://documents.worldbank.org/curated/en/282911575384211889/Decomposing-the-Labor-Productivity-Gap-between-Upper-Middle-Income-and-High-Income-Countries
http://hdl.handle.net/10986/33017
id okr-10986-33017
recordtype oai_dc
spelling okr-10986-330172022-09-20T00:13:47Z Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries Amin, Mohammad Islam, Asif Khalid, Usman LABOR PRODUCTIVITY HUMAN CAPITAL EDUCATIONAL ATTAINMENT Using firm-level survey data on registered private firms collected by the World Bank's Enterprise Surveys, this paper compares the level of labor productivity in 22 upper-middle-income countries and 11 high-income countries for which comparable data are available. The results show that labor productivity in the upper-middle-income countries is about 57.5 percent lower than in the high-income countries. The productivity difference is robust and holds for firms of different sizes and industries. The analysis uses the Oaxaca-Blinder decomposition to identify the sources of the productivity gap. It finds that the endowment effect and the structural effect contribute roughly equally to the productivity gap. Several firm- and country-level variables determine the productivity gap. The biggest contributors via the endowment effect include tertiary education attainment, law and order, and quality management proxied by international quality certification. Factors that contribute most via the structural effect include market size, secondary education attainment, and law and order. Thus, the results underline the importance of human capital, institutions, and market size for closing the productivity gap between the upper-middle-income and high-income countries. 2019-12-13T21:18:33Z 2019-12-13T21:18:33Z 2019-12 Working Paper http://documents.worldbank.org/curated/en/282911575384211889/Decomposing-the-Labor-Productivity-Gap-between-Upper-Middle-Income-and-High-Income-Countries http://hdl.handle.net/10986/33017 English Policy Research Working Paper;No. 9073 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic LABOR PRODUCTIVITY
HUMAN CAPITAL
EDUCATIONAL ATTAINMENT
spellingShingle LABOR PRODUCTIVITY
HUMAN CAPITAL
EDUCATIONAL ATTAINMENT
Amin, Mohammad
Islam, Asif
Khalid, Usman
Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries
relation Policy Research Working Paper;No. 9073
description Using firm-level survey data on registered private firms collected by the World Bank's Enterprise Surveys, this paper compares the level of labor productivity in 22 upper-middle-income countries and 11 high-income countries for which comparable data are available. The results show that labor productivity in the upper-middle-income countries is about 57.5 percent lower than in the high-income countries. The productivity difference is robust and holds for firms of different sizes and industries. The analysis uses the Oaxaca-Blinder decomposition to identify the sources of the productivity gap. It finds that the endowment effect and the structural effect contribute roughly equally to the productivity gap. Several firm- and country-level variables determine the productivity gap. The biggest contributors via the endowment effect include tertiary education attainment, law and order, and quality management proxied by international quality certification. Factors that contribute most via the structural effect include market size, secondary education attainment, and law and order. Thus, the results underline the importance of human capital, institutions, and market size for closing the productivity gap between the upper-middle-income and high-income countries.
format Working Paper
author Amin, Mohammad
Islam, Asif
Khalid, Usman
author_facet Amin, Mohammad
Islam, Asif
Khalid, Usman
author_sort Amin, Mohammad
title Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries
title_short Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries
title_full Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries
title_fullStr Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries
title_full_unstemmed Decomposing the Labor Productivity Gap between Upper-Middle-Income and High-Income Countries
title_sort decomposing the labor productivity gap between upper-middle-income and high-income countries
publisher World Bank, Washington, DC
publishDate 2019
url http://documents.worldbank.org/curated/en/282911575384211889/Decomposing-the-Labor-Productivity-Gap-between-Upper-Middle-Income-and-High-Income-Countries
http://hdl.handle.net/10986/33017
_version_ 1764477815735975936

Similar Items