Global Productivity

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CHAPTER 5

GLOBAL PRODUCTIVITY

FIGURE 5.1 Evolution of regional productivity in EMDE regions The slowdown in productivity growth following the GFC affected all regions but was particularly severe in EAP, ECA, and SSA. Productivity levels fell further behind advanced economy levels in some regions during the post-GFC period. In all regions, TFP contributed less to productivity growth in the post-GFC period.

A. Productivity growth

B. Share of economies with faster productivity growth than the average advanced economy

C. Rate of convergence to advanced economy productivity levels

D. Productivity levels

E. Factor contributions to regional productivity growth: EAP, ECA, and LAC

F. Factor contributions to regional productivity growth: MNA, SAR, and SSA

ECA

LAC

MNA

SAR

2013-18

2003-08

2013-18

Percent Capital deepening 10 Productivity (RHS) 8 6 4 2 0 -2

2003-08

2013-18

Percentage points TFP 10 Human capital 8 6 4 2 0 -2

2003-08

2013-18

2013-18

2003-08

2013-18

2003-08 EAP

2003-08

Percent Capital deepening 10 Productivity (RHS) 8 6 4 2 0 -2

Percentage points TFP 10 Human capital 8 6 4 2 0 -2

SSA

Sources: Barro and Lee (2015); The Conference Board; Groningen Growth Development Center database; Haver Analytics; International Labour Organization, ILOSTAT; International Monetary Fund; Organisation for Economic Co-operation and Development, Structural Analysis Database; Penn World Table; United Nations (Human Development Reports); Wittgenstein Centre for Demography and Global Human Capital; World KLEMS; World Bank (World Development Indicators).

Note: Productivity is defined as real GDP per worker (at 2010 market prices and exchange rates). Country group aggregates for a given year are calculated using constant 2010 U.S. dollar GDP weights. Data for multiyear spans show simple averages of the annual data.

EMDEs = emerging market and developing economies; GFC = global financial crisis; TFP = total factor productivity; EAP = East Asia and Pacific; ECA = Europe and Central Asia; LAC = Latin America and the Caribbean; MNA = Middle East and North Africa; SAR = South Asia; SSA = Sub-Saharan Africa.

A-D. Sample includes 35 advanced economies and 129 EMDEs. B. Horizontal line indicates 50 percent.

C. Rate of convergence is calculated as the difference in productivity growth rates with the average advanced economy divided by the log difference in productivity levels with the average advanced economy.

E.F. Productivity growth is computed as log changes. Sample includes 93 EMDEs, including 8 in EAP, 21 in ECA, 20 in LAC, 12 in MNA, 2 in SAR, and 30 in SSA.