LABOUR PRODUCTIVITY, STRUCTURAL CHANGE, AND BAUMOL’S “COST DISEASE” IN THE SERVICE SECTOR: A SECTORAL ANALYSIS OF THE UZBEKISTAN ECONOMY
DOI:
https://doi.org/10.5281/zenodo.22959843Abstract
Labour productivity dynamics across 19 branches of the Uzbek economy over 2017–2025 are analysed by decomposing aggregate productivity growth into within-branch and structural components and empirically testing Baumol’s cost disease hypothesis in the service sector. The results indicate that, during 2017–2023, within-branch efficiency accounted for 106.0% of aggregate productivity growth, whereas the contribution of structural reallocation was –6.0%. This finding indicates a reallocation of labour towards branches with below-average productivity levels. A “two-speed” structure is identified within the service sector: labour productivity increased by 59.9% in modern services and by 30.4% in traditional services, widening the productivity gap between the two groups from 4.36 to 6.68 times. The elasticity of relative prices with respect to productivity was –0.631 (p = 0.032), while the relationship between wage growth and productivity growth was statistically insignificant. These findings provide empirical support for both conditions of Baumol’s hypothesis. Based on the results, conclusions are formulated regarding the effective management of economic resources in service-sector enterprises.Keywords
labour productivity, structural change, shift-share decomposition, Baumol effect, cost disease, service sector, wages and productivity, UzbekistanReferences
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