Dissecting the Intersectoral Reallocation Effects in Industry Labor Productivities in the Philippines: Are the Effects in the Right Direction?

Dissecting the Intersectoral Reallocation Effects in Industry Labor Productivities in the Philippines: Are the Effects in the Right Direction? | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Dissecting the Intersectoral Reallocation Effects in Industry Labor Productivities in the Philippines: Are the Effects in the Right Direction? Justin Raymond Eloriaga, Jesus Dumagan This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6507706/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Productivity was an important determinant to the growth story of the Philippines over the past few decades. In particular, its growth in labor productivity and the reallocation of labor has played a crucial role in the growth of the country. To sustain the growth in labor productivity and subsequently economic growth, it is of paramount importance to determine if labor is moving in the right direction or to sectors with higher productivity. Hence, this paper aims to determine the factors affecting labor productivity and the implications of the intersectoral reallocation effect in order to effectively communicate policy implications of the reallocation of labor in the economy. The results seem to suggest contentious flows of labor in some sectors and some years using the intersectoral reallocation effect as basis. Furthermore, a bias is seen in using traditional decompositions using incorrect shares which may cause misleading interpretations and policy directions. In addition, labor movements from lower productivity sectors to higher productivity sectors may not always be the best course of action if the underlying motivation is increasing labor productivity growth. JEL Classification C43 · E23 · E24 Labor Productivity Sectoral Productivity Generalized Exactly Additive Decompositions Intersectoral Reallocation Effects Panel Data Econometrics Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-6507706","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":446923219,"identity":"e6c18c6e-2fef-4f25-83d7-09b2da3c4b4f","order_by":0,"name":"Justin Raymond Eloriaga","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAAyElEQVRIiWNgGAWjYBACxgbmBgYGAwY5hABhLYxgLcbEa4GpSWxA4eIDzO2NjY8rCuzS+8UOH/vMw2Aju+EAITt6DjYbnjFIzp05Oy15Ng9DmjFhLTMS2yQbDJhzN9zOMWbmYTicSFjL/IcgLfXp9hAt/4nQMoMRpOVwgoE0WMsBIrT0JDYbNhgcN5xxOy2ZcY5BsvFMQloM2w8ffNjwp1qef3byYYY3FXayfQS1NCBxmHgMCCgHAXkUV/4gQscoGAWjYBSMPAAA1yJBzWFmx/IAAAAASUVORK5CYII=","orcid":"","institution":"Emory University","correspondingAuthor":true,"prefix":"","firstName":"Justin","middleName":"Raymond","lastName":"Eloriaga","suffix":""},{"id":446923220,"identity":"713eeb75-59fb-48f9-8524-9971118ada36","order_by":1,"name":"Jesus Dumagan","email":"","orcid":"","institution":"De La Salle University","correspondingAuthor":false,"prefix":"","firstName":"Jesus","middleName":"","lastName":"Dumagan","suffix":""}],"badges":[],"createdAt":"2025-04-23 00:38:12","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-6507706/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-6507706/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":83064075,"identity":"34d1c3f6-f641-4911-aae4-8d5dddabb137","added_by":"auto","created_at":"2025-05-19 15:17:07","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":1482555,"visible":true,"origin":"","legend":"","description":"","filename":"DumaganEloriagaJEG.pdf","url":"https://assets-eu.researchsquare.com/files/rs-6507706/v1_covered_d5816953-f8f0-4b2d-95f1-4dd78770416e.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Dissecting the Intersectoral Reallocation Effects in Industry Labor Productivities in the Philippines: Are the Effects in the Right Direction?","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Labor Productivity, Sectoral Productivity, Generalized Exactly Additive Decompositions, Intersectoral Reallocation Effects, Panel Data Econometrics","lastPublishedDoi":"10.21203/rs.3.rs-6507706/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-6507706/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eProductivity was an important determinant to the growth story of the Philippines over the past few decades. In particular, its growth in labor productivity and\u0026nbsp;the reallocation of labor has played a crucial role in the growth of the country. To\u0026nbsp;sustain the growth in labor productivity and subsequently economic growth, it is of\u0026nbsp;paramount importance to determine if labor is moving in the right direction or to\u0026nbsp;sectors with higher productivity. Hence, this paper aims to determine the factors\u0026nbsp;affecting labor productivity and the implications of the intersectoral reallocation\u0026nbsp;effect in order to effectively communicate policy implications of the reallocation\u0026nbsp;of labor in the economy. The results seem to suggest contentious flows of labor in\u0026nbsp;some sectors and some years using the intersectoral reallocation effect as basis. Furthermore, a bias is seen in using traditional decompositions using incorrect shares\u0026nbsp;which may cause misleading interpretations and policy directions. In addition, labor movements from lower productivity sectors to higher productivity sectors may\u0026nbsp;not always be the best course of action if the underlying motivation is increasing\u0026nbsp;labor productivity growth.\u003c/p\u003e\n\u003cp\u003eJEL Classification C43 · E23 · E24\u003c/p\u003e","manuscriptTitle":"Dissecting the Intersectoral Reallocation Effects in Industry Labor Productivities in the Philippines: Are the Effects in the Right Direction?","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-04-24 08:55:18","doi":"10.21203/rs.3.rs-6507706/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"c3b40813-177c-40ae-929e-eb673bc5dbb3","owner":[],"postedDate":"April 24th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2025-05-19T15:08:51+00:00","versionOfRecord":[],"versionCreatedAt":"2025-04-24 08:55:18","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-6507706","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-6507706","identity":"rs-6507706","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}