Ahmed, SabinMengistae, TayeYoshino, YutakaZeufack, Albert G.2015-12-182015-12-182015-12https://hdl.handle.net/10986/23467Uganda’s economy underwent significant structural change in the 2000s whereby the share of non-tradable services in aggregate employment rose by about 7 percentage points at the expense of the production of tradable goods. The process also involved a 12-percentage-point shift in employment away from small and medium enterprises and larger firms in manufacturing and commercial agriculture mainly to microenterprises in retail trade. In addition, the sectoral reallocation of labor on these two dimensions coincided with significant growth in aggregate labor productivity. However, in and of itself, the same reallocation could only have held back, rather than aid, the observed productivity gains. This was because labor was more productive throughout the period in the tradable goods sector than in the non-tradable sector. Moreover, the effect on aggregate labor productivity of the reallocation of employment between the two sectors could only have been reinforced by the impacts on the same of the rise in the employment share of microenterprises. The effect was also strengthened by a parallel employment shift across the age distribution of enterprises that raised sharply the employment share of established firms at the expense of younger ones and startups. Not only was labor consistently less productive in microenterprises than in small and medium enterprises and larger enterprises across all industries throughout the period, it was also typically less productive in more established firms than in younger ones.en-USCC BY 3.0 IGOJOBSEMPLOYMENTGROWTH RATEMONETARY POLICYMOTIVATIONPRODUCTIVITY LEVELSECONOMIC GROWTHPRODUCTIONAGGREGATE PRODUCTIVITYEMPLOYMENT SHAREINFORMAL SECTORSTRUCTURAL CHANGEINCOMEPRODUCTIVE EMPLOYMENTSERVICE SECTOREMPLOYMENT OPPORTUNITIESSERVICE INDUSTRIESTRADE BARRIERSAGE GROUPELASTICITY OF DEMANDINFORMATIONPRODUCTIVE INDUSTRIESEXPORTSELASTICITYPOLITICAL ECONOMYJOB‐CREATIONWELFAREJOBAGGREGATE PRODUCTIVITYFIRM‐ SIZEAGE GROUPSDISTRIBUTIONVARIABLESMARGINAL PRODUCTIVITYINPUTSRETAIL TRADEREAL WAGESPRODUCTIVITY INCREASEEMPLOYMENT SIZEFREE TRADEWAGE GROWTHJOB LOSSESTRENDSDRIVERSDEVELOPMENTPER CAPITA INCOMESLABOR MARKETPER CAPITA INCOMEEMPLOYMENT LEVELSDEVELOPMENT ECONOMICSEXPORT GROWTHTELECOMMUNICATIONSAGE‐GROUPSFIRM LEVELWORKERGROUP WORKERPRODUCTIVITYEXPORT LED GROWTHLABOR PRODUCTIVITYINDUSTRIALIZATIONINCREASING RETURNSORGANIZATIONSMANUFACTURING INDUSTRIESGROWTH RATEAGE GROUPOPEN ECONOMYLABORLABOR PRODUCTIVITYTOTAL EMPLOYMENTEMPLOYMENT SHAREECONOMIC RESEARCHTAXESUNEMPLOYMENTLABOR MARKETJOB‐DESTRUCTIONPRODUCTIVITY GROWTHVALUE ADDEDWORKERSPRODUCTIVITY LEVELSWAGESINTERNATIONAL TRADEREAL WAGEHIGH EMPLOYMENTVALUECOMPETITIVENESSCREDITMACROECONOMICSPRODUCT DIFFERENTIATIONAGE GROUPSCOMPARATIVE ADVANTAGEOCCUPATIONECONOMYAGRICULTUREMANUFACTURING INDUSTRIESPRODUCT DIFFERENTIATIONPRODUCTIVE FIRMSECONOMIC RENTSEMPLOYMENT GROWTHJOB CREATIONAGGREGATE EMPLOYMENTGROUP WORKERMEASUREMENTSHARESECONOMIC THEORYTRADE LIBERALIZATIONMANPOWERMANAGEMENTPRODUCTIVITY DECOMPOSITIONMANUFACTURING INDUSTRIESTRADEGDPEXPORT‐LED GROWTHGOODSTHEORYECONOMIES OF SCALEENTRY COSTSGROWTH RATECOMPARATIVE ADVANTAGETRADE LIBERALIZATIONPRODUCTIVITY GAPINCOME ELASTICITY OF DEMANDEMPLOYEEPRODUCT MARKETSECONOMIES OF SCALEDEVELOPMENT ECONOMICSPRODUCTIVITY GAINSLABOURAGGREGATE EMPLOYMENTUNSKILLED LABORSELF‐EMPLOYMENTSMALL BUSINESSESPRICESLABOR REALLOCATIONDEVELOPMENT POLICYMANUFACTURING INDUSTRIESEMPLOYEESWorking PaperWorld Bank10.1596/1813-9450-7504