The Informality Productivity Gap
On Thursday, the 5th of February, Prof. Gaaitzen de Vries from the partner institution of the University of Groningen, kicked off the 2026 Seminar Series. He presented his paper, titled, “The Informality Productivity Gap.”
This seminar successfully hosted 23 participants from Ghana, South Africa, Germany, and the Netherlands virtually.
About the paper
The standard measure of the agricultural productivity gap (APG) in developing countries contrasts productivity in agriculture with non-agriculture, without accounting for formal and informal activities within sectors. This paper exploits national accounts base year revisions in sub-Saharan African countries that provide estimates of sectoral value added by formality. Combined with corresponding employment estimates, we reassess the APG. We examine whether observed productivity differences arise primarily across sectors or between formal and informal activities. Our findings show that productivity gaps between formal and informal activities are an order of magnitude larger than the conventional APG. This reframes the APG as primarily an informality productivity gap, with implications for how structural transformation is measured and understood.
About the presenter
Gaaitzen de Vries is an associate professor (with ius promovendi) at the Department of Global Economics and Management at the University of Groningen and is a member of the Groningen Growth and Development Centre. His research is focused on international development economics, in particular on the relation between structural change, global value chains and economic development. De Vries has a PhD from the University of Groningen (2010). He is an advisor to various (international) organizations, such as the OECD and the World Bank. He has published extensively in journal including the American Economic Review, the Journal of Economic Perspectives, the Journal of Economic Geography, and the Journal of Development Economics.