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-specific 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., difference in productivity growth), by implementing a structural estimation on individual earnings equations. We verify the dual partition and sector-specific 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.
| Original language | English |
|---|---|
| Pages (from-to) | 365-412 |
| Number of pages | 48 |
| Journal | B.E. Journal of Macroeconomics |
| Volume | 15 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2015 Jan 1 |
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All Science Journal Classification (ASJC) codes
- Economics and Econometrics
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Complementarity and transition to modern economic growth. / Jeong, Hyeok; Kim, Yong Jin.
In: B.E. Journal of Macroeconomics, Vol. 15, No. 1, 01.01.2015, p. 365-412.Research output: Contribution to journal › Review article
TY - JOUR
T1 - Complementarity and transition to modern economic growth
AU - Jeong, Hyeok
AU - Kim, Yong Jin
PY - 2015/1/1
Y1 - 2015/1/1
N2 - 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-specific 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., difference in productivity growth), by implementing a structural estimation on individual earnings equations. We verify the dual partition and sector-specific 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.
AB - 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-specific 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., difference in productivity growth), by implementing a structural estimation on individual earnings equations. We verify the dual partition and sector-specific 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.
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UR - http://www.scopus.com/inward/citedby.url?scp=84919723932&partnerID=8YFLogxK
U2 - 10.1515/bejm-2013-0171
DO - 10.1515/bejm-2013-0171
M3 - Review article
VL - 15
SP - 365
EP - 412
JO - B.E. Journal of Macroeconomics
JF - B.E. Journal of Macroeconomics
SN - 1935-1690
IS - 1
ER -