Indexing Structural Distortion: Sectoral Productivity, Structural Change and Growth

September 19, 2017

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Sakai Ando, and Koffie Ben Nassar. Indexing Structural Distortion: Sectoral Productivity, Structural Change and Growth, (USA: International Monetary Fund, 2017) accessed November 23, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper proposes a new index of sectoral labor distortion using employment and valueadded shares. We show that this index is highly correlated with growth both crosssectionally and over time. We also use it to compare the degree of distortion among countries and identify sectors where the potential payoffs in terms of growth from reforms could be large. The regression analysis in the paper shows that education and various structural reforms have potential to improve the efficiency of sectoral labor allocation.

Subject: Agricultural sector, Economic sectors, Production, Productivity, Total factor productivity

Keywords: Agricultural sector, Growth, Index, Policy variable, Productivity, Productivity equalization, Productivity line, Productivity sector, Regression analysis, Resource misallocation, Sectoral distortion, Sectoral productivity, Structural change, Sub-Saharan Africa, Total factor productivity, WP

Publication Details

Pages:

48
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/205
Stock No:

WPIEA2017205
ISBN:

9781484319277
ISSN:

1018-5941

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