Impacts of sectoral labour productivity growth of emerging countries in East Asia

This paper aims to examine the impact of sector-specific labour productivity growth on the overall labour productivity growth of emerging countries in East Asia to investigate which effect of labour productivity growth played a decisive role in the overall productivity growth; and what the contributions of sectors to the overall productivity gains were. The shift-share analysis of the labour productivity was applied to the time-series data of the APO Productivity Database 2019 Version 1 and decomposed overall labour productivity growth into the growth of the sectoral labour productivity within the sector and the effects brought by inter-sectoral labour reallocation. The result of the shift-share analysis revealed that the services sector had made a substantial contribution to the overall labour productivity growth of emerging countries in East Asia both in terms of labour productivity growth within the sector and labour reallocation to the services sector. Based on the result of the analysis, this paper includes discussion on possible policy options for boosting labour productivity of these countries to sustain their medium- and long-term economic growth.