Regional and sectoral labor productivity convergence in Turkey

Abstract

This paper analyzes regional and sectoral convergence in labor productivity in Turkey for the period of 2004-2011 by using cross section beta convergence analysis, shift-share analysis and Wei -Kang (2006) beta decomposition analysis. Our results show that despite slight improvement in between regions labor productivity heterogeneity, between 2004-2011 period convergence take place in each sector and gross economy but speed and significance level vary widely. Second, we inquire the sources of found convergence and see that sectoral productivity growth contributed as much as employment flows into more productive regions. With respect to sectors' contribution; labor productivity improvements in agriculture sector is contributing more than other sectors to the aggregate convergence. Our study differentiates itself from the rest of the literature in three aspects. Firstly, it extends the studied period to 2011. Secondly, it is the first to find regional convergence for industrial, service, and agricultural sectors. Finally, given the aforementioned results, it is the first to decompose the productivity convergence to the components. © 2016, Asociacion Euro-Americana de Estudios del Desarrollo. All rights reserved.