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Job Creation and Labor Productivity in Mauritius

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Job Creation and Labor Productivity in Mauritius Public Disclosure Authorized Public Disclosure Authorized Job Creation and Labor Productivity in Mauritius Public Disclosure Authorized Public Disclosure Authorized Table of Contents Boxes ............................................................................................................................................................................. v Figures ........................................................................................................................................................................... v Tables ...........................................................................................................................................................................vi Acknowledgments ........................................................................................................................................................ix Executive Summary ......................................................................................................................................................xi 1. Introduction ............................................................................................................................................................... 1 2. A bird’s-eye view of the Mauritian private sector ..................................................................................................... 6 3. Labor Productivity: Trends and Patterns ................................................................................................................. 20 4. Constraints to Productivity Growth ......................................................................................................................... 36 5. Which Firms Grow? Evidence from a Small Sample of Large Firms ..................................................................... 64 6. Conclusions and Policy Implications ....................................................................................................................... 72 References ................................................................................................................................................................... 74 Annex A: Data Sources ............................................................................................................................................... 75 Annex B: A Review of the Quality of Institutions Supporting SMEs ......................................................................... 80 Annex C: Statistical Annex ......................................................................................................................................... 84 Boxes Box 1.1 Definitions........................................................................................................................................................ 5 Box 2.1 Informal Sector: Low Value Added and High Employment .......................................................................... 14 Box 2.2 The end of preferential access ........................................................................................................................ 18 Box 4.1 Determinants of TFP ...................................................................................................................................... 37 Box 4.2 A Brief Institutional History .......................................................................................................................... 56 Box 4.3 SME Support Schemes ................................................................................................................................... 60 Box 5.1 Limitations of the Panel Dataset of Large Establishments ............................................................................. 65 Figures Figure 1.1. Sectoral distribution of value added, 1976-2017 ......................................................................................... 1 Figure 1.2. Average annual growth of GDP per capita, 2000-17 .................................................................................. 2 Figure 1.3. Decomposition of growth in per capita value added, 2002-13 and 2013-17 ............................................... 2 Figure 1.4. Contribution of capital, labor, and TFP to annual GDP growth, 2002-13 and 2013-17 .............................. 3 Figure 1.5. Trends of capital, labor, and TFP, 2000-17 ................................................................................................. 4 Figure 2.1. Number of establishments by employment size, 2002–13 .......................................................................... 6 Figure 2.2. Distribution of establishments by district, 2013 .......................................................................................... 7 Figure 2.3. Distribution of establishments by type of ownership, 2002-13 ................................................................... 8 Figure 2.4. Value Added and Employment Distribution by Size of Establishment, 2002-13 ....................................... 8 Figure 2.5. Change in Employment by Size of Establishment, 2002-13 ....................................................................... 9 Figure 2.6. Value Added and employment distribution by sector, 2002-13 ................................................................ 10 Figure 2.7. Changes in Value Added by sector and establishment size, 2002-13........................................................ 11 Figure 2.8. Changes in Employment by Sector and Size of Establishment, 2002-13 .................................................. 12 Figure 2.9. Distribution of small establishments by age group, 2007 .......................................................................... 13 Figure 2.10. Distribution of small establishments by age and size, 2007 .................................................................... 13 Figure 2.11. Numbers of Establishments by Formality Status and by Sector, 2007 and 2013 .................................... 14 Figure 2.12. Number of small establishments by formality status and size, 2007 and 2013 ....................................... 14 Figure 2.13. Valued Added by Formality Status, 2007 and 2013 ................................................................................ 15 Figure 2.14. Total Employment by formality status, 2007 and 2013........................................................................... 15 Figure 2.15. Number of Establishments by export status, 2007 and 13 ....................................................................... 16 v Figure 2.16. Value Added and Employment by export status, 2007-13 ...................................................................... 17 Figure 2.17. Mauritius export basket, 2000 and 2016 ................................................................................................. 18 Figure 3.1. Average labor productivity, 2002-13 ........................................................................................................ 21 Figure 3.2. Labor productivity levels and growth rates in Mauritius and peer countries............................................. 22 Figure 3.3. Average labor productivity by establishment size, 2002-13...................................................................... 23 Figure 3.4. Labor Productivity Annual Growth Rate, 2002-13 ................................................................................... 23 Figure 3.5. Median monthly wages by educational level and size of establishment, 2013.......................................... 24 Figure 3.6. Monthly earnings by employment category and employment types by consumption decile, 2013 .......... 25 Figure 3.7. Labor productivity by formality status and size – small establishments, 2007 and 2013 .......................... 26 Figure 3.8. Labor productivity by establishments size and sector, 2013 ..................................................................... 27 Figure 3.9. Differentials in average labor productivity by establishments size and sector, 2013 ................................ 28 Figure 3.10. Annualized growth in labor productivity by establishments size and sector, 2002-13 ............................ 29 Figure 3.11. Annual changes in value added and employment by establishment size and sector, 2002-13 ................ 30 Figure 3.12. Sectoral distribution of employment by decile of per adult equivalent household income, 2007-13 ...... 32 Figure 3.13. Distribution of educational attainment by sector of employment, 2007-13 ............................................ 33 Figure 3.14. Distribution of educational attainment by decile of per adult equivalent household income, 2007-13 ... 35 Figure 4.1. Competitiveness Gaps within and across Regions, 2017 .......................................................................... 38 Figure 4.2. Global Competitiveness Index Rankings, Mauritius and Peers, 2017 ....................................................... 38 Figure 4.3. Innovation, Mauritius and Peers, 2017 ...................................................................................................... 39 Figure 4.4. Technological Readiness, Mauritius and Peers, 2017 ............................................................................... 40 Figure 4.5. Rankings on Institutions and Infrastructure Pillars, Mauritius and Peers, 2017 ........................................ 41 Figure 4.6. Distance to Frontier Score, Doing Business report, Mauritius and Peers, 2019 .......................................
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