Productivity, structural change and skills dynamics in Tunisia and Turkey

Abstract EN

This article explores the contribution of the structural change and the skill upgrading of the labor force to productivity growth in Tunisia and Turkey in the post-WorldWar II period.

Our growth decomposition shows that productivity growth is explained by intra-industry changes for both countries during the import substitution period.

Structural change played an important role in Turkey for a longer period of time than in Tunisia.

Based on a regression analysis, we find evidence that skill upgrading had a causal impact on productivity growth in Turkey, as productivity has mainly been driven by the increasing share of highly educated workers within sectors rather than the reallocation of skilled labor between sectors.

In addition, skill upgrading has been as important as physical capital accumulation.

On the other hand, OLS and IV evidence do not support similar mechanisms for Tunisia.