Labour Productivity and Structural Transformation: A Tale of 3 African Economies

Taruna Shalini Ramessur

doi:doi:10.11648/j.eco.20211004.14

| Peer-Reviewed

Labour Productivity and Structural Transformation: A Tale of 3 African Economies

Taruna Shalini Ramessur

Published in Economics (Volume 10, Issue 4)

Received: 6 September 2021 Accepted: 19 October 2021 Published: 27 November 2021

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

Structural transformation is hypothesized by growth accounting to be at the core of the process of economic development and a crucial source of labour productivity growth. Despite the key importance of structural transformation in driving economic performance, investigations on the impacts of structural change on labour productivity growth in Sub-Saharan Africa region has been minimal if not absent from the literature. This paper caters for this literature gap by examining the extent to which structural change explain the dynamics of labor productivity growth in three African countries. Using data from Benin, Mauritius and Tanzania the study adopts a mixture of approaches: trend analysis, regression analysis and the shift-share analysis to achieve its objective. The main findings indicate that first in both Benin and Tanzania workers’ productivity are far higher in non-agricultural sectors and hence a reallocation of labour from the agriculture sector would boost overall productivity in these two economies. Second, countries which ‘leap frog’ from the agriculture to the services sector, bypassing the industry sector, tend to experience weak if not negative dynamic effects of a reallocation of workers from agriculture to services. Third, countries which have undergone advanced structural transformation, like Mauritius need to revamp their sectors or look for new emerging sectors if they are to further exploit the contribution of structural change to labour productivity growth.

Published in	Economics (Volume 10, Issue 4)
DOI	10.11648/j.eco.20211004.14
Page(s)	139-151
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Labour Productivity Growth, Structural Transformation, Mauritius, Benin, Tanzania

References

[1]	Benjamin N. and Mbaye A. A.,‘The Informal Sector in Francophone Africa: Firm Size’, Productivity and Institutions (Washington, District of Columbia: World Bank, 2012a).
[2]	Campbell H. F., ‘Measuring the Contributions of Education to Labour Productivity in a Developing Economy’, International Journal of Education Economics and Development, 1, no. 2 (2009), 156-65.
[3]	Caselli F., ‘“Accounting for cross-country income differences,” Handbook of Economic Growth’, 1 (2005), 679-741.
[4]	Chan M. W. L. and Mountain D. C., ‘Measuring Contributing Factors to Interregional Agricultural Labour Productivity Differentials: A Joint Profit Formulation’, Journal of Regional Science, 27, no. 2 (1987), 269-81.
[5]	Christiaensen L., Demery L., and Kuhl J., ‘The (Evolving) Role of Agriculture in Poverty Reduction’, Working Paper No. 2010/36 (United Nations University, World Institute for Development Economics Research, 2010a).
[6]	Cooksey B., Politics, Patronage and Projects: The Political Economy of Agricultural Policy in Tanzania, FAC Working Paper 40 (Brighton: Future Agricultures Consortium, 2012).
[7]	Coulibaly K. and Iyadema J. B., Trade and Rural Sector Financing in Rwanda (Mission Report, Rwanda DTIS, June 22 - July 9, 2005), (2005).
[8]	Cowen T., The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (Dutton, 2011).
[9]	Dasgupta S. and Singh A., ‘Manufacturing, Services and Premature Deindustrialization in Developing Countries: A Kaldorian Analysis’, in, G. Mavrotas and A. Shorrocks (eds.) Advancing Development. Studies in Development Economics and Policy [DOI: 10.1057/9780230801462_23] (London: Palgrave Macmillan, 2007).
[10]	Dasgupta S. and Singh A., ‘Will Services Be the New Engine of Indian Economic Growth?’, Development and Change, 36, no. 6 (2005), 1035-57.
[11]	De Janvry A. and Sadoulet E., ‘Agricultural Growth and Poverty Reduction: Additional Evidence’, World Bank Research Observer, 25, no. 1 (2010), 1-20.
[12]	Diao X., Harttgen, K. and McMillan M., ‘The Changing Structure of Africa’s Economies’, World Bank Economic Review, 31, no. 2 (2017), 412-33.
[13]	Douglas G., David L., and Waugh, ‘Agricultural Productivity Gap’, Quarterly Journal of Economics (2014).
[14]	Fabricant S., Employment in Manufacturing, 1899-1939: An Analysis of Its Relation to the Volume of Production, (1942) -, , Production.
[15]	Fagerberg J., ‘Technological Progress, Structural Change and Productivity Growth: A Comparative Study’, Structural Change and Economic Dynamics, 11, no. 4 (2000), 393-411.
[16]	Gordon R. J., ‘Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds’ National Bureau of Economic Research Working Paper No. 18315, Voprosy Ekonomiki, no. 4 (2012), 49-67.
[17]	Gordon R. J., The Rise and Fall of American Growth: The U. S. Standard of Living Since the Civil War (Princeton University Press, 2016).
[18]	Joshi S., ‘Tertiary Sector-Driven Growth in India: Impact on Employment and Poverty’, Economic and Political Weekly, 39, no. 37 (2004), 4175-8.
[19]	Kaldor N., Productivity and Growth in Manufacturing Industry: A Reply, Economica, New Series, vol. 35, no. 140, (1968), 385-91.
[20]	Korkmaz S., Korkmaz O., ‘The Relationship Between Labor Productivity and Economic Growth in OECD Countries’, International Journal of Economics and Finance, 9, no. 5 (2017), 71-6.
[21]	Lewis W. A., ‘Economic Development with Unlimited Supplies of Labour’, Manchester School, 22, no. 2 (1954), 139-91.
[22]	Loayza N. V., Oviedo A. M., and Serven L., ‘The Impact of Regulation, Growth and Informality-Cross-Country Evidence’. World Bank Policy Research Working Paper Series 3623 (Washington, District of Columbia: World Bank, 2005).
[23]	McMillan M. and Rodrik, ‘Globalization, Structural Change, and Productivity Growth, with an Update on Africa’, Published in World Development, vol. 63, (2014), 11-32.
[24]	McMillan, M., & Harttgen, K., ‘What is driving the ‘African growth miracle’? National Bureau of Economic Research Working Paper Series no. 20077 (2014).
[25]	Msame J. and Wangwe S., ‘Industrial Development in Tanzania’, in, Carol Newman, John Page, John Rand, Abebe Shimeles, Måns Söderbom, and Finn Tarp (eds.) Manufacturing Transformation: Comparative Studies of Industrial Development in Africa and Emerging Asia, 155-73 (Oxford University Press, 2016).
[26]	Ogura K., ‘Long Working Hours in Japan: An International Comparison and Research Topics’, Japanese Economy, 36, no. 2 (2009), 23-45.
[27]	Palle, J. Dwyer, and David G., ‘Productivity and Growth’, Proceedings of the Conference Held at the H. C. Coombs Centre for Financial Studies, Kirribilli, Australia (1995)
[28]	Perry G. E., W. F. Maloney, O. S. Arias, et al., Informality: Exit and Exclusion (Washington, District of Columbia: World Bank, 2007).
[29]	Restuccia D., Yang, and X. Zhu D. T., ‘Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis’, Journal of Monetary Economics, 55, no. 2 (2008), 234-50.
[30]	Solow R. M., ‘A Contribution to the Theory of Economic Development’, Quarterly Journal of Economics, 70 (1956), 65-94.
[31]	Steel W. F. and Snodgrass D., ‘Raising Productivity and Reducing Risks of Household Enterprises: Diagnostic Methodology Framework’, World Bank Africa Region Analysis on the Informal Economy (Washington, District of Columbia: World Bank, 2008).
[32]	Timmer M. P. and de Vries G. J., ‘Structural Change and Growth Accelerations in Asia and Latin America: A New Sectoral Data Set’, Cliometrica, 3, no. 2 (2009), 165-90 -, .
[33]	Timmer M. P. and Szirmai A., ‘Productivity Growth in Asian Manufacturing: The Structural Bonus Hypothesis Examined’, Structural Change and Economic Dynamics, 11, no. 4 (2000), 371-92.
[34]	Wu H. X., ‘Measuring Industry Level Employment, Output and Labour Productivity in the Chinese Economy, 1987-2008’, Economic Review, 64, no. 1 (2013), 42-61.
[35]	Zulu J. J. and Banda B. M., ‘The Impact of Labour Productivity on Economic Growth: The Case of Mauritius and South Africa’, Southern African Journal of Policy and Development, 2, no. 1 (2015), article 6.

Cite This Article

Plain Text BibTeX RIS

APA Style

Taruna Shalini Ramessur. (2021). Labour Productivity and Structural Transformation: A Tale of 3 African Economies. Economics, 10(4), 139-151. https://doi.org/10.11648/j.eco.20211004.14

Copy | Download

ACS Style

Taruna Shalini Ramessur. Labour Productivity and Structural Transformation: A Tale of 3 African Economies. Economics. 2021, 10(4), 139-151. doi: 10.11648/j.eco.20211004.14

Copy | Download

AMA Style

Taruna Shalini Ramessur. Labour Productivity and Structural Transformation: A Tale of 3 African Economies. Economics. 2021;10(4):139-151. doi: 10.11648/j.eco.20211004.14

Copy | Download

@article{10.11648/j.eco.20211004.14,
  author = {Taruna Shalini Ramessur},
  title = {Labour Productivity and Structural Transformation: A Tale of 3 African Economies},
  journal = {Economics},
  volume = {10},
  number = {4},
  pages = {139-151},
  doi = {10.11648/j.eco.20211004.14},
  url = {https://doi.org/10.11648/j.eco.20211004.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20211004.14},
  abstract = {Structural transformation is hypothesized by growth accounting to be at the core of the process of economic development and a crucial source of labour productivity growth. Despite the key importance of structural transformation in driving economic performance, investigations on the impacts of structural change on labour productivity growth in Sub-Saharan Africa region has been minimal if not absent from the literature. This paper caters for this literature gap by examining the extent to which structural change explain the dynamics of labor productivity growth in three African countries. Using data from Benin, Mauritius and Tanzania the study adopts a mixture of approaches: trend analysis, regression analysis and the shift-share analysis to achieve its objective. The main findings indicate that first in both Benin and Tanzania workers’ productivity are far higher in non-agricultural sectors and hence a reallocation of labour from the agriculture sector would boost overall productivity in these two economies. Second, countries which ‘leap frog’ from the agriculture to the services sector, bypassing the industry sector, tend to experience weak if not negative dynamic effects of a reallocation of workers from agriculture to services. Third, countries which have undergone advanced structural transformation, like Mauritius need to revamp their sectors or look for new emerging sectors if they are to further exploit the contribution of structural change to labour productivity growth.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Labour Productivity and Structural Transformation: A Tale of 3 African Economies
AU  - Taruna Shalini Ramessur
Y1  - 2021/11/27
PY  - 2021
N1  - https://doi.org/10.11648/j.eco.20211004.14
DO  - 10.11648/j.eco.20211004.14
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 139
EP  - 151
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20211004.14
AB  - Structural transformation is hypothesized by growth accounting to be at the core of the process of economic development and a crucial source of labour productivity growth. Despite the key importance of structural transformation in driving economic performance, investigations on the impacts of structural change on labour productivity growth in Sub-Saharan Africa region has been minimal if not absent from the literature. This paper caters for this literature gap by examining the extent to which structural change explain the dynamics of labor productivity growth in three African countries. Using data from Benin, Mauritius and Tanzania the study adopts a mixture of approaches: trend analysis, regression analysis and the shift-share analysis to achieve its objective. The main findings indicate that first in both Benin and Tanzania workers’ productivity are far higher in non-agricultural sectors and hence a reallocation of labour from the agriculture sector would boost overall productivity in these two economies. Second, countries which ‘leap frog’ from the agriculture to the services sector, bypassing the industry sector, tend to experience weak if not negative dynamic effects of a reallocation of workers from agriculture to services. Third, countries which have undergone advanced structural transformation, like Mauritius need to revamp their sectors or look for new emerging sectors if they are to further exploit the contribution of structural change to labour productivity growth.
VL  - 10
IS  - 4
ER  -

Copy | Download

Author Information

Taruna Shalini Ramessur

Department of Economics and Statistics, Faculty of Social Sciences and Humanities, University of Mauritius, Réduit, Mauritius

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Taruna Shalini Ramessur. (2021). Labour Productivity and Structural Transformation: A Tale of 3 African Economies. Economics, 10(4), 139-151. https://doi.org/10.11648/j.eco.20211004.14

Copy | Download

ACS Style

Taruna Shalini Ramessur. Labour Productivity and Structural Transformation: A Tale of 3 African Economies. Economics. 2021, 10(4), 139-151. doi: 10.11648/j.eco.20211004.14

Copy | Download

AMA Style

Taruna Shalini Ramessur. Labour Productivity and Structural Transformation: A Tale of 3 African Economies. Economics. 2021;10(4):139-151. doi: 10.11648/j.eco.20211004.14

Copy | Download

@article{10.11648/j.eco.20211004.14,
  author = {Taruna Shalini Ramessur},
  title = {Labour Productivity and Structural Transformation: A Tale of 3 African Economies},
  journal = {Economics},
  volume = {10},
  number = {4},
  pages = {139-151},
  doi = {10.11648/j.eco.20211004.14},
  url = {https://doi.org/10.11648/j.eco.20211004.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20211004.14},
  abstract = {Structural transformation is hypothesized by growth accounting to be at the core of the process of economic development and a crucial source of labour productivity growth. Despite the key importance of structural transformation in driving economic performance, investigations on the impacts of structural change on labour productivity growth in Sub-Saharan Africa region has been minimal if not absent from the literature. This paper caters for this literature gap by examining the extent to which structural change explain the dynamics of labor productivity growth in three African countries. Using data from Benin, Mauritius and Tanzania the study adopts a mixture of approaches: trend analysis, regression analysis and the shift-share analysis to achieve its objective. The main findings indicate that first in both Benin and Tanzania workers’ productivity are far higher in non-agricultural sectors and hence a reallocation of labour from the agriculture sector would boost overall productivity in these two economies. Second, countries which ‘leap frog’ from the agriculture to the services sector, bypassing the industry sector, tend to experience weak if not negative dynamic effects of a reallocation of workers from agriculture to services. Third, countries which have undergone advanced structural transformation, like Mauritius need to revamp their sectors or look for new emerging sectors if they are to further exploit the contribution of structural change to labour productivity growth.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Labour Productivity and Structural Transformation: A Tale of 3 African Economies
AU  - Taruna Shalini Ramessur
Y1  - 2021/11/27
PY  - 2021
N1  - https://doi.org/10.11648/j.eco.20211004.14
DO  - 10.11648/j.eco.20211004.14
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 139
EP  - 151
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20211004.14
AB  - Structural transformation is hypothesized by growth accounting to be at the core of the process of economic development and a crucial source of labour productivity growth. Despite the key importance of structural transformation in driving economic performance, investigations on the impacts of structural change on labour productivity growth in Sub-Saharan Africa region has been minimal if not absent from the literature. This paper caters for this literature gap by examining the extent to which structural change explain the dynamics of labor productivity growth in three African countries. Using data from Benin, Mauritius and Tanzania the study adopts a mixture of approaches: trend analysis, regression analysis and the shift-share analysis to achieve its objective. The main findings indicate that first in both Benin and Tanzania workers’ productivity are far higher in non-agricultural sectors and hence a reallocation of labour from the agriculture sector would boost overall productivity in these two economies. Second, countries which ‘leap frog’ from the agriculture to the services sector, bypassing the industry sector, tend to experience weak if not negative dynamic effects of a reallocation of workers from agriculture to services. Third, countries which have undergone advanced structural transformation, like Mauritius need to revamp their sectors or look for new emerging sectors if they are to further exploit the contribution of structural change to labour productivity growth.
VL  - 10
IS  - 4
ER  -

Copy | Download