Author : Oh Jeung-il(New Growth Industries Division)
Research on the issue of convergence of income has flourished recently. Most
studies have concentrated on the question of convergence of GDP per capita.
Although GDP is the aggregate value added from a variety of regions, few studies have focused on the question of convergence of labor productivity at the disaggregated level of regions.This monograph studies the question of convergence of labor productivity at the disaggregated level of regions in Korea. The transition matrix is used for this analysis, instead of the so-called Barro regression that is very often used in studies of convergence. We believe that it is important to reduce the regional gap in GDP per capita. In order to do this, the regional labor productivity should converge. Also, the reason for using the transition matrix is that this method is more informative concerning the evolution of the distribution of labor productivity. Using the transition matrix, we can figure out the dynamics of regional manufacturing sector for certain period, whereas the regression method enables us to compare two different states.