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June 11, 2026Journal of African EconomiesOpen Access

Regional differences in informal–formal productivity gaps: Implications for productivity growth from structural transformation in Ghana

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Authors

SPSaumik PaulCenter for Global DevelopmentDRDhushyanth RajuWorld Bank

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Overview

Randomized trial shows that reducing labor misallocation decreases productivity gaps in Ghana, indicating growth potential.

Key Points

  • The central aim is to explore how regional productivity gaps between the informal and formal sectors affect overall productivity growth in Ghana.
  • Analyzed data from a census of firms in Ghana.
  • Modelled intersectoral allocation of labour and its impact on productivity gaps.
  • Examined the effects of reducing labour misallocation by 50% on regional productivity disparities.
  • A 50% reduction in intersectoral misallocation lowers regional productivity disparities by 50%.
  • Structural transformation led to a 3% increase in aggregate productivity in Ghana.
  • The findings highlight the importance of addressing labour misallocation for economic growth.

Cite This Study

Paul et al. (2026) studied this question.

synapsesocial.com/papers/6a2a520a80c8f91e7f39e1e3https://doi.org/10.1093/jae/ejag007
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