Productivity in Brazil -...
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Productivity in Brazil Fernando de Holanda Barbosa Filho
Transcript of Productivity in Brazil -...
Productivity in Brazil
Fernando de Holanda Barbosa Filho
• Total Factor Productivity is stagnated over the last three
decades. And also per capita GDP.
• Since the 80´s, Brazilian growth was based on factor
expansion and not on productivity.
• Only, during short periods of time, Brazil observed
productivity gains that generated faster growth like in the
period 2003-2008.
Introduction
GDP per capita
• Brazilian GDP per capita grew at 4.4% in the period 1947-
1980 and only 0.7% in the period 1980-2016.
Growth Rate
1947-1980 4,4
1980-2016 0,7
GDP per capita
GDP per capita
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Brasil Chile China Coreia
• There was TFP growth only in the period 2003-2010.
Productivity Evolution
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PTF (1980=100)
• Labor productivity had a relative sustainable growth over
the last decades.
Productivity Evolution
90,0
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• Capital Producitivity seems the real problem.
Productivity Evolution
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Growth Decomposition Analysis
• GDP growth can be decomposed on: TFP,
capital and labor.
1LuKAY
L
L
uK
uK
A
A
Y
Y
)1()(
Growth Decomposition Analysis
GDP TFP Hours WorkedUsed
Capital
1982-2016 2,4 0,4 0,9 1,1
16,2 36,7 47,1
1982-1994 2,5 0,0 1,1 1,4
-1,7 45,3 56,3
1994-2002 2,3 0,3 1,1 0,9
11,6 48,7 39,7
2002-2010 3,9 1,6 1,1 1,2
41,1 27,9 31,0
2010-2014 2,2 0,5 0,0 1,7
24,2 0,5 75,3
2014-2016 -3,7 -1,9 -0,7 -1,1
49,9 19,8 30,3
2010-2016 0,2 -0,3 -0,2 0,7
-119,8 -107,9 327,7
D(Dilma1-Lula) -1,8 -1,1 -1,1 0,4
62,3 62,2 -24,5
D(Dilma2-Lula) -3,7 -1,9 -1,3 -0,5
50,7 36,0 13,3
Growth Decomposition Analysis
• Growth can also be decomposed on labor
productivity, weekly hours and workers.
L
L
JT
JT
y
y
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y
y
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LJTyLL
H
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YLyL
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h
Growth Decomposition Analysis
GDPLabor
ProductivityEmployed
Week
hours
1982-2016 2,4 0,9 1,9 -0,4
38,8 79,6 -18,4
1982-1994 2,5 0,6 2,4 -0,6
24,5 99,8 -24,2
1994-2002 2,3 0,4 2,0 -0,1
18,9 86,1 -5,0
2002-2010 3,9 2,1 2,1 -0,3
53,5 53,4 -6,9
2010-2014 2,2 2,2 0,9 -0,9
99,2 41,7 -40,9
2014-2016 -3,7 -2,5 -0,7 -0,5
67,0 19,4 13,6
2010-2016 0,2 0,6 0,4 -0,8
279,8 166,5 -346,3
D(Dilma1-Lula) -1,8 0,1 -1,2 -0,6
-3,7 68,0 35,7
D(Dilma2-Lula) -3,7 -1,5 -1,7 -0,5
40,0 46,7 13,3
Growth Decomposition Analysis
• Growth can also be decomposed on capital
productivity, capital utilization and capital
supply.
K
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u
y
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uKyuKuK
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uK
uK
Growth Decomposition Analysis
GDPCapital
ProductivityCapital Utilization
1982-2016 2,4 -0,4 2,9 -0,1
-17,8 121,2 -3,4
1982-1994 2,5 -1,0 3,0 0,5
-40,8 120,8 20,0
1994-2002 2,3 0,0 2,4 -0,1
0,7 105,8 -6,5
2002-2010 3,9 0,9 2,3 0,8
22,6 57,6 19,9
2010-2014 2,2 -1,9 4,5 -0,4
-88,3 206,8 -18,4
2014-2016 -3,7 -0,9 3,2 -6,0
24 -87
2010-2016 0,2 -1,6 4,1 -2,3
-719 1851
D(Dilma1-Lula) -1,8 -2,8 2,3 -1,2
161,2 -129,0 67,8
D(Dilma2-Lula) -3,7 -2,5 1,8 -3,1
66,6 -49,0 82,4
Growth Decomposition Analysis
• TFP can be decomposed in labor productivity
and capital productivity:
1
1
1 Tk PPL
Y
uK
Y
LuK
YA
Growth Decomposition Analysis
TFPLabor
Productivity
Capital
Productivity
1982-2016 0,4 0,6 -0,2
144 -44
1982-1994 0,0 0,4 -0,4
-888 988
1994-2002 0,3 0,3 0,0
98 2
2002-2010 1,6 1,3 0,4
78 22
2010-2014 0,5 1,3 -0,8
246 -146
2014-2016 -1,9 -1,5 -0,4
81 19
2010-2016 -0,3 0,4 -0,6
-140 240
D(Dilma1-Lula) -1,1 0,0 -1,1
-3,6 103,6
D(Dilma2-Lula) -1,9 -0,9 -1,0
47,4 52,6
Low Productivity
• Education
- Bad quality.
- Lack of emotional abilities.
• Informality
• High turnover
• Small firms
• Misallocation
Labor Productivity
• Education improvement was not transformed in productivity.
-10.000
0
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0,00 2,00 4,00 6,00 8,00 10,00 12,00 14,00
Y/L
Escolaridade Média
Brasil Chile China Coreia Linear (Brasil) Linear (Chile) Linear (China) Linear (Coreia)
GDP Per capita X Schooling
Labor Productivity
• Informality (Barbosa Filho e Veloso (2016)
- Informal economy less productive than formal.
- Forma aggregate productivity around 3,4 times informalsector (2009 data)
- Employment reallocation explains up to 87% of laborproductivity gain between 2003 and 2009.
Labor Productivity
• High Turnover (Barbosa Filho and Cavalcante (2015))
- High turnover reduces learning by doing reducing
productivity gains.
- Reduction of the turnover of 20% would increase labor
productivity gains by 0.1% per year.
Reduction in probability of separation
10% 20% 25% 50% 75%
Increasing in tenure (months)
0.6 1.4 1.9 5.6 16.8
Increase in wages for Young workers (em p.p.)
0.2 0.4 0.6 1.7 5.0
Labor productivity gains for the economy (em p.p.)
0.0 0.1 0.1 0.4 1.3
Labor Productivity
• Small firms
Fonte: Barbosa Filho & Corrêa (2016)
Misallocations
• Vasconcelos follows Hsieh and Klenow (2009) and
shows that Brazilian firms operates around 50% of its
efficiency.
• Comparing with Hsieh and Klenow results, inefficiency
in Brazil is higher that in India and China.
Potential Output growth
GDP TFP Labor Capital
2002-2008 3,7% 1,7% 2,0% 2,0%
2002-2010 3,6% 1,6% 1,8% 2,3%
2010-2015 1,6% -0,1% -0,2% 4,4%
Estimate A 1,5% 0,0% 1,2% 2,0%
Estimate B 2,2% 0,5% 1,2% 2,5%
Potential GDP Growth
Conclusion
• Productivity growth is low over the last decades in
Brazil.
• Education was not translated into productivity.
• High informality reduces productivity.
• High turnover reduces incentives for learning by doing,
employer investment on employee and so on.
• Existence of heavy tail of low productive firms reduces
aggregated productivity.
• Lower productivity reduces growth.
