Complementarity and Transition to Modern Economic Growth
- Complementarity and Transition to Modern Economic Growth
- Jeong, Hyeok
- experience-labor complementarity; structual transformation; transition dynamics; growth and inequality dynamics; modernization of Thailand
- Issue Date
- Series/Report no.
- KDI Working Paper Series;WP12-10
- 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.
- Files in This Item:
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.