Sectoral contributions to the Brazilian productivity growth at the brink of the 21^st century using different decomposition methods

ABSTRACT  This article presents an analytical and empirical assessment of the sectoral contributions to the labor productivity growth in Brazil over 20 years through different decomposition methods. Although these methods decompose aggregate productivity growth into the contributions of sectoral productivity and structural change, the key difference between them lies in how they address the issue of relative price changes in their formulations. This article applies five decompositions variations to evaluate the evolution the Brazilian economy productivity between 2000 and 2019, as well as in different sub-periods, based on data from 51 economic activities. According to the method and the sectoral aggregation adopted, the decomposition results change significantly, both at the aggregate and the sectoral levels, even showing opposite signs of the same estimated effect. Sector-wise, agricultural activities, despite their productive gains, showed no effective contribution to the aggregate result, with wholesale and retail trade and other traditional services, also in addition to mining and quarrying, as the main elements responsible for the (low) aggregate productivity growth, while construction and several manufacturing activities recorded negative contributions.

KEYWORDS:
Labor productivity; Brazilian economy; Growth decomposition; Relative prices; Sectoral contributions