Analysing Labour Productivity in Ecuador
We studied labour productivity growth in Ecuador from 1998 to 2006 by using firm-level data from the annual survey of manufacturing and mining. This period is characterised by the economic crisis in 1999 and important economic reforms. During the crisis, there was a two percent annual decrease in productivity in 1998–2000, but the recovery was strong with a five percent annual productivity growth in 2002–2004. Our productivity decomposition indicated that the main source of productivity growth came from firms with increasing productivity gaining market shares. Within-firm productivity decline was substantial during the crisis, but its growth was secondary in the post crisis recovery. Firm entry and exit only had minor impacts on labour productivity. Our distributional analysis further showed that labour productivity distribution increased in 2000–2002 and had remained at higher level for the rest of the sample period.
KeywordsLabour productivity Decomposition Distributional analysis
JEL codes:F31 D24 L11
We acknowledge the use of the np package by Hayfield and Racine (2008) and the use of the Quarry High Performance Cluster at Indiana University, where all the computations were performed. We thank Paul Carrillo, John Earle, Dan Kovenock, Jamil Mahuad, Mitsukuni Nishida, and participants of the 2010 Canadian Economic Association meetings and 2014 North American Productivity Workshop. The staff at the Ecuadorian National Statistics Office (INEC) provided great assistance with the data and answered many of our queries, in particular Galo Arias, Telmo Molina, Verónica Velázquez, Margarita Viera, and Byron Villacís. Ho thanks the U.S. Census Bureau for conference financial support. Jacho-Chávez thanks the Center for Latin American and Caribbean Studies (CLACS) at Indiana University for financial support. The views stated herein are those of the authors and not necessarily of the Bank of Canada. All errors are our own.
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