Distribution dynamics of alternative productivity measures: An empirical analysis

Abstract

This paper revisits the productivity convergence debate from the perspective of Structural Economic Dynamics. Building on a novel indicator of total labour productivity, we provide a comprehensive analysis of productivity convergence across 61 economies over the period 1995–2019. Instead of using regression methods, we make use of the distribution dynamics approach which captures the full evolution of productivity distributions over time. Our results reveal contrasting patterns of convergence depending on the measure chosen. While total factor productivity suggests reduced dispersion and a tendency toward homogeneity, apparent labour productivity and our measure indicate persistent polarisation, with countries clustering into high- and low-productivity groups.