Marianne Hvidt, University of Copenhagen

"Convergence of Sector Labor Productivity"


This paper investigates whether sector labour productivity is converging across a group of diverse countries covered by the Groningen Growth and Development Centre 10-Sector Database. Previous studies on the issue have relied either on OECD data, hereby severely limiting country coverage and introducing problems relating to sample selection, or data from the Unido Industrial Statistics, which suffer from both intertemporal and international inconsistency. This study will be the first on sector productivity
convergence using the GGDC 10-sector data, which acknowledges the potential importance of the absence of sector purchasing power parities when comparing sector productivity levels across countries. While such issues have proven severe enough to reverse results on sector productivity convergence for OECD countries, this study finds that the larger gaps in sector productivity rates for the analysed countries imply that convergence may largely be rejected, regardless of the applied conversion factor.