On the World Productivity Distribution: Recent Convergence and Divergence Patterns

The post-World War II period has seen substantial changes in labor productivity around the world. Motivated by these changes, this article documents four facts about the world productivity distribution. First, there is a large and increasing disparity between the tails. Second, this disparity rapidly increased in the mid-1980s, slowed down in the next decade, and stabilized in the mid-2000s. Third, overtime, there has been substantial forward and backward mobility of countries and regions. Fourth, the upper tail of the distribution is more sensitive to improvements in human capital, while the lower tail is more sensitive to improvements in efficiency.