Productivity Dynamics: A Case of Pakistan

Authors

  • Muhammad Nadeem Javaid Karachi School of Business and Leadership, National Stadium Road, 74800 Bahadurabad, Karachi, Pakistan
  • Gulzar Ahmed Ministry of Planning Development & Reform, Pakistan

DOI:

https://doi.org/10.47067/reads.v7i2.350

Keywords:

Productivity, Aggregate and Sectoral Level, Human Capital Formation

Abstract

This study estimates the total factor productivity (TFP) for Pakistan at aggregate and sectoral level from 1982 to 2016 with a data set rebased at 2005-06. We employ actual returns to scale instead of the oversimplified assumption of constant returns to scale for measuring the TFP. Our results show that average economic growth during this period is 4.7 percent with 0.7 percent contribution from TFP. While, average TFP growth for Agriculture, Industry, and Services sector is 1.5, 4.6, and 4.3 percent, respectively. Besides, there is a noticeable decreasing trend in TFP as well as economic growth relative to 1980’s. Further, our analysis reveals that the physical and human capital contribution in productivity is quite negligible at aggregate and sectoral level. This implies that sizeable investments in human capital formation can further help the economy to attain high growth trajectory in the short to medium terms.

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Additional Files

Published

2021-06-11

How to Cite

Javaid, M. N. ., & Ahmed, G. . (2021). Productivity Dynamics: A Case of Pakistan. Review of Economics and Development Studies, 7(2), 187-203. https://doi.org/10.47067/reads.v7i2.350