Drivers Of Labour Productivity Growth Trends In Singapore: An Update Using Value-Added Per Actual Hour Worked

This article examines the drivers of Singapore’s labour productivity growth in recent years.

First, a shift-share analysis indicates that a shift in hours worked towards less productive sectors, including the Construction and Food Services sectors, negatively contributed to Singapore’s labour productivity growth from 2009 to 2016. However, this effect was outweighed by productivity improvements in most sectors, particularly the outward-oriented sectors.

Second, using growth accounting analysis, we find that productivity growth from 2009 to 2015 was supported by improvements in both capital intensity and labour quality. Similar trends were observed for the period from 2010 to 2015.