1. Background and Purpose

The Korean economy registered unprecedented high growth rates of over 7% since the 1970s, made possible by rapid increases in factor inputs, such as labor and capital, and by rapid technological progress. The purpose of this study is to account for Korea’s economic growth by sector and to compare them with the experiences of developed countries.

Korean economy has gone through a rapid change in the industrial structure. Agriculture, forestry and fishing sector, which used to be the main industry in Korea, rapidly shrank, while the service sector has expanded enormously. Manufacturing sector expanded until 1980’s owing to the export-led growth strategy, started shrinking since then, but has been slowly expanding again since the economic crisis in late 1990’s. Considering the fact that the rapid change in the industrial structure implies the change in growth factor over time and across sectors, accounting for economic growth by sector is expected to help understand and forecast the growth pattern of the entire economy and can be utilized in establishing growth strategy.

According to the international comparison of structural change,
Korea’s industrial structure seems to follow those of the developed countries with the lag of two to three decades, although with some difference. In this sense, the international comparison of the growth factors could be utilized in forecasting the growth pattern by sector in the future.

2. Summary

A. Accounting for Economic Growth by Sector

This study analyzes the sector growth factors from the supply side for the period 1975-2000. The primary source of economic growth is the increase in production factors – labor and capital – and the enhancement of the production technology. In this study, we analyzed the growth factors of various sectors by ‘growth accounting’ method. The methodology adopted in this study consists of the following four steps. First, we rearranged the national income statistics and input-output(IO) tables according to the 29-sector classification of the KDI’s Multi-Sector Model, and adjusted the IO tables to the national income data by Stone’s RAS method. Second, we estimated the number of workers, employees, and unpaid workers by sector using the Economically Active Population Statistics and Employment Tables (attachment to IO tables). Third, National Wealth Survey data were used to compute the sectoral capital stock and the fixed capital formation data from the national account to compute the sectoral investment, both of which were combined by the perpetual inventory method to estimate the sectoral capital stock time-series.

Lastly, growth accounting method was used to decompose the growth rate of each sector into the contributions of the increase in the number of workers, capital stock and TFP for 1975-2000.

According to the results, the average annual growth rate of the Korean economy was estimated 7.04%, to which the contributions of the increase in the number of workers is 1.39%p, capital stock 3.37%p, and TFP 2.29%p. Contribution of TFP in this study is higher than those in other studies, which is due to the fact that the contribution of human capital is included in the contribution of TFP. It turned out that the contribution of labor input decreased over decades, while that of capital stock stayed constant. Contribution of TFP was at a high level of 3.28%p in 1980’s, but decreased to 2.29%p in 1990’s. Out of 29 sectors considered in this study, textile and apparel sector showed huge negative growth due to significant decrease in labor input. Electric and electronic products and communication sectors, on the other hand, showed largest contribution of TFP enhancement.

B. International Comparison of Growth Accounting

In this study, we used OECD’s STAN DB(Structural Analysis Database) for the purpose of international comparison of 15 countries for 1980-2000, and we adopted the 6-sector classification; (1) agriculture, forestry and fishing (2) mining, (3) manufacturing, (4) electricity, gas and water supply, (5) construction and (6) service.

Results showed that the growth rates of the Korean economy were the highest among the 15 countries, which were 8.29% in 1980’s and 5.97% in 1990’s compared to 2~3.5% of other 14 countries. Australia and USA accomplished relatively high growth rates over 3% in both decades, while Italy, Denmark and Sweden showed slow growth, slightly higher than 2%. Growth rates of Korea, France, Finland, Italy decreased over decades, while those of Norway, Netherlands and Denmark increased.

In 1980’s, contributions of labor, capital and TFP were all the highest in the 15 countries, which implies that the rapid economic growth of Korea in 1980’s was the result of rapid increase both in factor input and in TFP. In 1990’s, however, the average annual growth rate significantly declined from 8.3% to 6.0%, due to the decrease in the contribution of labor, from 1.6%p to 0.9%p, and TFP, from 3.3%p to 1.7%p. It turned out that in many developed countries, on the other hand, the contribution of TFP increased; e.g., Finland and Norway achieved around 2.5% TFP growth, and Australia, Canada and USA also achieved high TFP growth rates, significantly higher than that of Korea. This result implies that the increase in the capital stock played the major role in Korea’s economic growth in 1990’s.

In Korea, manufacturing sector showed growth rate higher than both other sectors in Korea and manufacturing sectors in other countries, 10.6% in 1980’s and 8.0% in 1990’s. This was made possible by rapid increase in the countributions of both production factors and TFP. It should be said, on the other hand, that the contribution of TFP increased in other countries, e.g., 5.0%p in Finland, 3.1%p in Canada, and 3.0%p in USA.

Growth rate of Korea’s service sector turned out to be the lowest in the 15 countries, 7.8% in 1980’s and 5.8% in 1990’s. In addition, the growth of Korea’s service sector was made possible mostly by the increase in factor input, that is, with highly small contribution of TFP growth, while the growth of other countries’ service sectors achieved increasing contribution of TFP.

발 간 사
요 약

제１장 서 론

제２장 산업부문별 성장요인분석: 1975~2000
　제１절 연구의 목적과 의의
　제２절 부문별 GDP 추정
　제３절 부문별 노동투입 시계열 추정
　제４절 부문별 자본스톡 시계열 추정
　제５절 부문별 성장요인분석

제３장 성장요인분석의 국제비교
　제１절 서 론
　제２절 분석절차
　제３절 성장요인분석의 국제비교

제４장 결 론

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