American Economic Review: Insights
ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)
Unconditional Convergence in Manufacturing: A Reassessment
American Economic Review: Insights
(pp. 303–19)
Abstract
The movement of labor out of agriculture is a central feature of the development process. A long-held view is that successful development requires that much of the labor released from agriculture be allocated to manufacturing rather than services. Rodrik's (2013) finding of unconditional convergence for manufacturing productivity, using data from UNIDO, provided empirical support for this view. We argue that the UNIDO data are ill-suited for studying cross-country productivity dynamics. Using recently released GGDC data designed for this purpose, we revisit the issue and find no evidence of unconditional convergence in manufacturing productivity over 1990–2018.Citation
Herrendorf, Berthold, Richard Rogerson, and Ákos Valentinyi. 2026. "Unconditional Convergence in Manufacturing: A Reassessment." American Economic Review: Insights 8 (3): 303–19. DOI: 10.1257/aeri.20250071Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- L60 Industry Studies: Manufacturing: General
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O14 Industrialization; Manufacturing and Service Industries; Choice of Technology
- O47 Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- Q10 Agriculture: General