Abstract
The chapter utilizes quantile regression to decipher heterogeneous effects on labour productivity in Malawi. In general, the results show that labour productivity in Malawi is influenced by urbanization rate, gross capital formation, inflation rate, education expenditure, male labour force participation rate, trade, and foreign direct investment. Female labour force participation rate and elder dependency ratio were found to have no influence on labour productivity at any quantile level. Ordinary least squares regression results, on the other hand, show only gross capital formation, gross domestic saving, and education expenditure as significant drivers of labour productivity. The study proposes policies that harness employment dynamics in the urban sector, encourage domestic investment and improve the quality of foreign direct investment, enhance human capital development, boost labour force participation, and enhance trade. Further, there is the need to consider heterogeneous effects on labour productivity in the conduct of economic and labour market policies.