advanced economy. This may partly reflect the close economic integration of the region’s economies.

- **ECA** Close trade integration with western Europe, strong growth since the deep recessions following the collapse of the Soviet Union, and relatively high initial productivity levels in some cases have led economies in the ECA region to have the second-highest average labor productivity level among EMDE regions. However, there is significant variation, with output per worker in non-oil commodity exporters in the region averaging just one-quarter of the output per worker relative to commodity-importing economies.

- **LAC** In LAC, the labor productivity gap with advanced economies has widened since the 1970s, with labor productivity falling from 23 to 20 percent of the levels in the average advanced economy.

- **MENA** While the region has the highest average labor productivity it also has an exceptionally wide range of labor productivity levels. This ranges from 10 percent of the advanced economy average in Egypt and Morocco to over 100 percent of the advanced economy average in oil-exporting economies such as Qatar.<sup>4</sup>

- **SAR** Despite relying on commodity imports in aggregate, South Asian economies are heavily reliant on the agricultural sector. Agriculture has accounted for 18 percent of value-added since 2010, compared to the EMDE average of 10 percent. In addition, SAR is the region with the largest number of informal workers (World Bank, 2019a). These two factors may help to account for uniformly low labor productivity in EMDEs in the region.

- **SSA** Labor productivity in SSA is among the lowest across EMDE regions. There is a degree of heterogeneity: in its most productive economy, South Africa, labor productivity has been just 29 percent of the advanced-economy average since 2010. However, fragile and conflictaffected economies—14 out of the 39 SSA economies in the sample—had less than half of the labor productivity level of the SSA average.

The stark divide between advanced economy and EMDE labor productivity levels significantly exceeds regional variations among EMDEs—a polarization exists in the distribution of productivity levels, with EMDEs concentrated at the bottom of the distribution, while advanced economies occupy a wide range of significantly higher productivity levels (Quah 1996b, 1997a, **Figure 1** ). On average during 2010-18, EMDE productivity was concentrated around $7,000 of output per worker per year, while advanced economies are clustered around a high level of productivity peaking at $95,000, below the United States ($109,000) but above lower-productivity advanced economies such as the Republic of Korea ($48,000). The fact that EMDE and advanced economies cluster around these highly differential productivity levels is strong evidence both for convergence being conditional and for the presence of multiple points of attraction for productivity.

Following a steep decline in EMDE productivity growth in the 1980s and early 1990s, caused by a series of financial crises in SSA and LAC, and the collapse of the Soviet Union, growth rose sharply in the late 1990s (World Bank, 2020a). For the first time since the dataset began in 1970,

> 4Saudi Arabia and Qatar have labor productivity levels that are close to that of the United States, but TFP levels are just half those of the United States as measured in the Penn World Table.

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