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Paper #1888

Industrialization without innovation
Paula Bustos, Juanma Castro-Vincenzi, Joan MonrĂ s y Jacopo Ponticelli
Septiembre 2023
Labor-saving technologies in agriculture cam foster structural transformation byre-leasing workers who find jobs in manufacturing. The traditional view is that factor reallocation towards manufacturing Generates innovation and productivity growth. We document, instead, that regions more exposed to a large and exogenous in-crease in agricultural productivity in Brazil industrialized but experienced lower manufacturing productivity growth. Workers released from agriculture were mostly unskilled and primarily moved to the least skill-intensive manufacturing industries. This paper explores the various Mechanisms that can account for the observed manufacturing productivity decline. Changes in worker composition and lower incentives to innovate within manufacturing play prominent roles.
Palabras clave:
agricultural productivity, skill-biased technical change, productivity, labor mobility, genetically engineered soy, Brazil
Códigos JEL:
F16, J43, O13, O14, O33, O41
Área de investigación:
Macroeconomía y Economía Internacional

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