From Farms to Factories and Firms—Structural Transformation and Labor Productivity Growth in Malaysia

Author:

Rahman Amanina Abdur1,Schmillen Achim2

Affiliation:

1. The World Bank 1818 H Street NW Washington, DC 20433 aabdurrahman@worldbank.org

2. The World Bank 52-53 Jalan Jenderal Sudirman Jakarta 12190, Indonesia aschmillen@worldbank.org

Abstract

AbstractUsing data from the Department of Statistics Malaysia from 1987 to 2018 and decompositions that take account of both the static and dynamic efficiency gains from labor reallocation, this study documents that Malaysia has undergone structural transformation from an agriculture-driven to a services-driven economy. In contrast to common perceptions, however, the country's impressive growth in output per capita over the last three decades can largely be attributed not to its structural transformation but instead to sustained growth in within-sector labor productivity. At 3 percent, the contribution of between-sector reallocation of labor to output per capita growth has been relatively low.

Publisher

MIT Press

Subject

Political Science and International Relations,Economics and Econometrics,Finance

Reference21 articles.

1. Wage Differentials in Malaysia: Public Employment, Gender, and Ethnicity;Clark;Asian Economic Papers,2021

2. Manufacturing Matters… But It's the Jobs that Count;Felipe;Cambridge Journal of Economics,2019

3. Malaysian Industrialisation in Historical Perspective;Jomo,1993

4. Foreign Workers and Productivity in an Emerging Economy: The Case of Malaysia;Jordaan;Review of Development Economics,2018

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