Labor productivity in the middle income trap and the graduated countries

Yılmaz, Gökhan

doi:10.1016/j.cbrev.2016.05.004

Cited by 12 publications

(16 citation statements)

References 17 publications

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“…As a major research method we opted to shift-share analysis of its ability to measure the importance of reallocation of labor among sectors and to understand structural change patterns along with their repercussions on growth in many countries, Yilmaz (2016). The results have shown similar results counted for both economies.…”

Section: Resultsmentioning

confidence: 99%

“…As a main research method, standard shift-share analysis have been applied. The methodological approach comes from (Fagerberg, 2000), however the same approach with slight modifications is used by (Yilmaz, 2016 andde Vries et al, 2013) and others. The labor productivity was computed as a simple ratio of output (Gross value added -GVA) in industry in absolute value divided by the number of employees in corresponding industry in absolute value.…”

Section: Methodsmentioning

confidence: 99%

“…To measure the importance of reallocation of labor among sectors for growth, a conventional shift-share analysis was usually used. Yilmaz (2016) listed several variants of the shift-share analysis coming from (McMillan & Rodrik 2011;de Vries et al 2013;de Vries 2009 andFagerberg, 2000). The basic shift share equation decomposes the change in aggregate productivity into a "within" and "between" (structural change) effect.…”

Section: Methodsmentioning

confidence: 99%

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Structural and productivity shift of industries in Slovakia and Czech Republic: A comparative study

Mariš¹

2019

Journal of International Studies

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The objective of this paper was to explore the labor productivity growth and employment changes, thereby describing structural changes in the economies of Slovakia and Czech Republic in the time span of 1996-2016. As the main research method we chose shift-share analysis. The decomposition of the method identified the factors behind structural changes. The results shown that during the study period, the main driver of labor productivity in both economies was the upgrade of productivity itself within the industries (the socalled "within effect"). Slovakia was able to outpace Czech Republic in case of industrial production, agriculture and professional services. Employment had been evolving in both economies differently, particularly, Slovakia recorded the drop in employment in the sector of industrial production, whereas Czech Republic did not. Both economies have recorded labor switch from the primary sector to the services sector or to manufacturing. Overall taken, despite of very similar natural and geographic conditions, same political integration trends, and also similar economic background, perhaps due to the influence of sovereign policies and institutions, these two economies have been evolving differently. 314This topic is particularly important for the EU member states due to the presence of the European single market which fosters competitiveness, however, it might contribute to rising regional gap between "more" and "less" productive member states. Moreover, if particular EU states are integrated into European Monetary Union, the macroeconomic imbalances might have more profound impact on the structural stability of the whole monetary block.Recent analysis has pointed on substantial productivity growth rates in the 1990s and 2000s for the new EU member countries, particularly in the case of Czech Republic and Hungary. For instance, in the case of Czech Republic the average annual labor productivity growth rate was observed through several consecutive time periods (: 3,03%). As we can see from these numbers, impressively strong pace of growth soon became rather moderate. The analysis also indicates that the contribution of sectoral employment shifts to productivity increase is rather limited. The results identified are a likely reason for productivity gains and the shift of workers to more productive sectors (Mitkova & Dawid, 2016).Economic developments in the new EU member states during the transition period were also characterized by large shifts in the sectoral composition of GDP and employment, indicating a clear tendency of adjustment towards the broad economic structures in the EU-15. These broad shifts may thus be summarized under the headings of de-agrarization, de-industrialization and tertiarization (Havlík, 2005).The objective of the paper is twofold. First, it is to evaluate and compare the magnitude of structural changes in labor productivity and employment rearrangement across the industries of the national economies of Slovakia and Czech Republic. The second one is to identify the main fa...

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Section: Resultsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

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Structural and productivity shift of industries in Slovakia and Czech Republic: A comparative study

Mariš¹

2019

Journal of International Studies

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“…Malaysia has been identified as one of the developing countries that are caught in the middle income trap—a situation in which national growth slows after reaching middle‐income levels, making it difficult to transition to high‐income levels (Yilmaz, ). In such a sluggish economy, the manufacturing industry is unable to compete in terms of cost or value‐added skills (Kam, ).…”

Section: Meeting the Workforce Challengementioning

confidence: 99%

Formulating the right labor mix for a Malaysian food manufacturer

Muthusamy¹,

Rasid²

2018

Glob Bus Org Exc

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A heavy dependence on an unskilled migrant labor pool with a high turnover rate was impeding productivity for a food manufacturer in Malaysia. At the same time, the Malaysian government was encouraging industries to reduce their reliance on foreign unskilled workers and improve the training of local talent to drive growth. These circumstances led the food company's managers to reevaluate its workforce model. An internal task force, which was established to analyze the company's labor mix and make workforce planning recommendations, considered desired level of stability, internal requirements, evolving government policies and legislation, and the organization's strategic direction. The new system that was proposed decreased the company's reliance on temporary, unskilled foreign labor, improved local recruitment and training, and reduced turnover among skilled personnel.

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“…Over the last decade, growth slowdowns of middle-income countries or prolonged periods of stagnation have received increasing interests (Glawe and Wagner, 2019). This is because the standard growth theory suggests that middle-income countries are more likely to grow faster than high-income countries (Gill, Kharas, and others, 2007;Otsuka, Higuchi and Sonobe, 2017;Yılmaz, 2016). This paradox in growth theory or the growth slowdowns of the middle-income countries is known as the middle-income trap (MIT) (Yee and Robertson, 2016;Aiyar et al, 2018;Saner at al., 2014).…”

Section: Introductionmentioning

confidence: 99%

Growth Slowdowns and Middle-Income Trap: Evidence From New Unit Root Framework

Furuoka

Pui

Ezeoke

et al. 2020

Singapore Econ. Rev.

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This paper suggests a new testing procedure to systematically examine the middle-income trap (MIT). To empirically demonstrate this procedure, one high income and 14 middle-income countries are examined using newly developed unit root tests — Fourier ADF with structural break (FADF-SB) and Seemingly Unrelated Regressions Fourier ADF (SUR-FADF). The FADF-SB test incorporates unknown nonlinearity and smooth break in the time-series, while the SUR-FADF test accounts for cross-sectional dependency. The empirical findings produced mixed results: 10 countries have a relatively high possibility of facing the MIT problem, while only one country has a relatively low possibility of facing the problem. For the remaining three countries, it is uncertain whether they will face the problem of MIT. These empirical findings have significant policy implications.

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Labor productivity in the middle income trap and the graduated countries

Cited by 12 publications

References 17 publications

Structural and productivity shift of industries in Slovakia and Czech Republic: A comparative study

Structural and productivity shift of industries in Slovakia and Czech Republic: A comparative study

Formulating the right labor mix for a Malaysian food manufacturer

Growth Slowdowns and Middle-Income Trap: Evidence From New Unit Root Framework

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