Complementarity and Transition to Modern Economic Growth

Title
Complementarity and Transition to Modern Economic Growth
Authors
Jeong, Hyeok
Keywords
experience-labor complementarity; structual transformation; transition dynamics; growth and inequality dynamics; modernization of Thailand
Issue Date
2012-03
Series/Report no.
KDI Working Paper Series;WP12-10
Abstract
The Thai Socio-Economic Survey suggests that new labor market entrants increasingly enter activities with high and positive productivity growth (modern sector), but continue to enter activities with low productivity growth (traditional sector). Workers appear to stick to their initial choice of entry between these two sectors throughout their work careers. We postulate that the transition from the traditional to modern sector is gradual because sector-speci c work experience complements labor. We measure the technology parameters of each sector and the partition of the economy consistent with the identifying assumption of each sector (i.e. di¤erence in productivity growth), by implementing a structural estimation on individual earnings equations. We verify the dual partition and sector-speci c complementarity do indeed exist. We then build and simulate a model of sectoral choice which explains well the observed transition dynamics of workers across sectors at the estimated parameters, using the Thai micro data.
URI
http://archives.kdischool.ac.kr/handle/11125/17341
Files in This Item:
Appears in Collections:
KDI School Working Paper Series


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.