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Why do South Korean firms produce so much more output per worker than Ghanaian ones?

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  • Why do South Korean firms produce so much more output per worker than Ghanaian ones?
  • Baptist, Simon; Teal, Francis J.
  • Institute for the Study of Labor


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Title Why do South Korean firms produce so much more output per worker than Ghanaian ones?
Similar Titles
Material Type Reports
Author(English)

Baptist, Simon; Teal, Francis J.

Publisher

Bonn:Institute for the Study of Labor

Date 2015-06
Series Title; No IZA discussion papers / 9157
Subject Country Ghana(Africa)
South Korea(Asia and Pacific)
Language English
File Type Link
Subject Social Development < Education
Holding Institute for the Study of Labor

Abstract

Macro analysis of the sources of income differences has produced very different results as to the importance of education. In this paper we investigate the roles of education and technology in explaining differences in firm level productivity across Ghana and South Korea. The labour productivity differentials across these firms exceed those implied by macro analysis. Median value-added per employee is over thirty times higher in South Korean than in Ghanaian manufacturing firms. We show that if we allow for a non-linear effect of education on output the whole of the average productivity differences across the countries can be explained. We discuss the policy implications that flow from this finding.