Accounting for two-club convergence

We decompose the growth of labor productivity of 91 countries into components attributable to (1) technological change (the increase in total factor productivity), (2) capital deepening (the increase in the capital-labor ratio), and (3) the accumulation of human capital. We find that (a) two-club convergence (from 1965–2015) can not be attributed to any single factor and (b) the increased dispersion of the distribution over time is attributable primarily to physical capital accumulation with some help from human capital accumulation and technological change.