Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195060 
Year of Publication: 
2019
Series/Report no.: 
Hohenheim Discussion Papers in Business, Economics and Social Sciences No. 05-2019
Publisher: 
Universität Hohenheim, Fakultät Wirtschafts- und Sozialwissenschaften, Stuttgart
Abstract: 
In this article, we investigate the relevance of structural change in country-wide productivity growth considering within-country differences. For this purpose, we propose a two-step decomposition approach that accounts for differences among subnational units. To highlight the relevance of our procedure compared to the prevalent approach in the existing development literature (which usually neglects subnational differences), we show an application with data for the Mexican economy. Specifically, we contrast findings obtained from country-sector data on the one hand with those obtained from (more disaggregated) state-sector data on the other hand. One main insight is that the qualitative and quantitative results differ substantially between the two approaches. Our procedure reveals that structural change appeared to be growth-reducing during the period from 2005 to 2016. We show that this negative effect is driven mainly by the reallocation of (low-skilled) labor within subnational units.
Subjects: 
decomposition approach
economic development
labor reallocation
regional differences
structural change
JEL: 
L16
O10
O18
R11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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