Saumik Paul on Construction productivity and relative prosperity

Saumik Paul presents at the WIDER Seminar Series on 13 September 2023.

Construction productivity and relative prosperity

Abstract

Eliminating cross-country differences in the productivity of investment goods can lead to large reductions in aggregate income disparity. Among the components of investment, construction constitutes a large and fast-growing sector, with a shift of the downstream hub in construction in global value chains from advanced countries to emerging markets. In this paper, we examine the implications of heterogeneity in construction productivity on cross-country income disparity. Based on a sample of 145 countries, we estimate the 10:1 spread in construction productivity as a factor of 61.7-fold in 2005. Using a general equilibrium model with input-output linkages, we find that eliminating the cross-country construction productivity gap lowers the 10:1 spread in income per capita by 45 percent, from 55.4-fold in 2005 to 30.5-fold in 2011. Sectoral characterization of the aggregate effect from the change in construction productivity suggests heterogeneous roles of sectors in the convergence of income across countries. We find a stronger role of mining, metal, machinery, and electrical equipment in the aggregate propagation of the construction productivity shock in China compared to India.

About the presenter

Saumik Paul is an Assistant Professor at the Newcastle University Business School, and a Research Fellow at the Institute of Labor Economics (IZA). Prior to joining Newcastle University, he held academic positions at Hitotsubashi University, Osaka University and University of Nottingham. He also worked for various international organizations, including the World Bank, Washington DC, and the Asian Development Bank Institute, Tokyo. Saumik’s current research involves applications of microdata to examine macroeconomic theories on structural transformation, factor income shares, and productivity growth. His authored books and edited volumes are Labor Income Share: Understanding the Drivers of the Global Decline (2021), Land Acquisition in Asia: Towards a Sustainable Policy (2020), Kuznets Beyond Kuznets: Structural Transformation and Income Distribution in the Era of Globalization in Asia (2019), and Labor Income Share in Asia: Measurement, Drivers and Policy (2019). In addition, Saumik has published in several academic journals.

WIDER Seminar Series

The WIDER Seminar Series showcases the latest research on key topics in development economics. It provides a forum for senior and early-career researchers, both in-house and external, to present recent and ongoing work related to UNU-WIDER’s current work programme.

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