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Title: Human capital contributions to explain productivity differences
Authors: Chatzimichael, Konstantinos 
Tzouvelekas, Vangelis M. 
Keywords: Human capital;Labor efficiency;Labor productivity;Multilateral modes of production
Category: Economics and Business
Field: Social Sciences
Issue Date: 1-Jan-2014
Publisher: Kluwer Academic Publishers
Source: Journal of Productivity Analysis Volume 41, Issue 3, 2014, Pages 399-417
metadata.dc.doi: 10.1007/s11123-013-0355-x
Abstract: This paper develops a parametric decomposition framework of labor productivity growth relaxing the assumption of labor-specific efficiency. The decomposition analysis is applied to a sample of 121 developed and developing countries during the 1970-2007 period drawn from the recently updated Penn World Tables and Barro and Lee (A new data set of educational attainment in the world 1950-2010. NBER Working Paper No. 15902, 2010) educational databases. A generalized Cobb-Douglas functional specification is used taking into account differences in technological structures across groups of countries to approximate aggregate production technology using Jorgenson and Nishimizu (Econ J 88:707-726, 1978) bilateral model of production. The measurement of labor efficiency is based on Kopp's (Quart J Econ 96:477-503, 1981) orthogonal non-radial index of factor-specific efficiency modified in a parametric frontier framework. The empirical results indicate that the weighted average annual rate of labor productivity growth was 1.239 % over the period analyzed. Technical change was found to be the driving force of labor productivity, while improvements in human capital and factor intensities account for the 19.5 and 12.4 % of that productivity growth, respectively. Finally, labor efficiency improvements contributed by 9.8 % to measured labor productivity growth.
ISSN: 0895562X
Rights: © 2013 Springer Science+Business Media New York.
Type: Article
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