g=
Human capital accumulation in the East Asian NiCs has also been quite rapid. As shown in table 1-2 above, over the past two and a half decades the proportion of the working population with a secondary education or more doubled in Hong Kong and Taiwan, tripled in Korea and quadrupled in Singapore. By 1990/1991, some 18% to 20% of the working population in each economy had some tertiary education. In weighting labour input by sex, age and educational haracteristics(discussed further below), I have found that the improving educational attainment of the workforce contributes to about 1% per annum additional growth in labour input in each of these economies All of the influences noted above, rising participation rates, intersectoral transfers of labour, improving levels of education, and expanding investment rates, serve to chip away at the productivity performance of the East Asian NICs, drawing them from the top of Mount Olympus down to the plains of Thessaly. In a companion paper (Young 1993), I use simple back of the envelope calculations and large international data sets to show that, as regards productivity growth in the aggregate economy and in manufacturing in particular, the NiCs cannot be considered to be strong outliers in the post-war world economy. This paper concentrates on a more careful analysis of these four economies, making use of the extensive statistical record embodied in their national accounts, population censuses, and sectoral, wage and labour force urveys methodology. Sections II-VI then provide a country by country analysis of aggregate ang on The remainder of this paper is organized as follows: Section I presents a short review sectoral total factor productivity growth. Section Vil contrasts this research with earlier work on Defined as junior college and above in Korea and Taiwan and matriculation/a levels and above in Hong Kong and singapore
productivity growth in the NiCs, while section vim summarizes and concludes An appendix provides a description of sources and some of the problems encountered in linking different data senes
I Methodology The ranslog index of totaL Factor Productivity growth Consider the translogarithmic value added production function: (2. 1)2=expla+arInk +aInL +a,f+=Br(nk) +Baln)n)+BlnK+Bn)+Blm:t+3B where K, L and t denote capital input, labour input and time, and where, under the assumption of constant returns to scale, the parameters a and Ba satisfy the restrictions: (2.2)ax+aL=1 Br+BrL= Bu+Br Br+BL =0 First differencing the logarithm of the production function provides a measure of the causes of growth across discrete time periods Q+1/=6 Q() KT) +TFP T-1) 了-L了 whe百=()+6,7-1) and where the e;'s denote the share of each factor in total factor payments. The translog index of TFP growth(TFPT- 1r provides a measure of the amount the log of output would have ncreased had all inputs remained constant between two discrete time periods. In essence, the translog production function provides a theoretical justification for the use of average factor shares and log differences as a means of extending the continuous time Divisia analysis of
productivity growth to data based upon discrete time periods To allow consideration of more finely differentiated inputs, one can assume that aggregate capital and labour input are, in tun, constant returns to scale translog indices of sub-inputs: 5 (2.4)K=expla InK,+diNk,+.+o Ink (n}2+Bn)nk2)+…+B(n L= exp(afInE1+吃lnL2+…,+a Bi(nL,+Bi(nL,(nL BL, (nL] First differencing the logarithms of these translog indices provides a measure of the growth of aggregate capital and labour input as weighted averages of the growth rates of their sub-inputs (2.5) K, (T) Li T) K(T-1) KT-1) e(m)+6(T-1) nd where the 0,'s denote the share of each sub-input in total payments to its aggregate factor. In a manner analogous to the continuous time Divisia analysis, these indices adjust for improvements in the"quality"of aggregate capital and labour input by, to a first order approximation, weighting the growth of each sub-input by its average marginal product The appropriate measure of capital and labour input is the flow of services emanating from those inputs. For labour, one can reasonably assume that the flow of services is proportional to total hours of work, i. e L, (T)=mH,(T),with With similar restrictions on parameter values. 7