Total productivity grows through technological progress or reallocation of resources. This paper analyses their contribution to economic growth by decomposing economy-wide and sectoral productivity changes into reallocation of labor and internal productivity growth using Korean firm-level data. The main finding is that inter-sector reallocation of labor negatively contributes to productivity growth as employment moves to service sectors with low productivity, but this is offset by industrial technological progress. On the other hand, intra-sector decomposition of productivity growth shows that both reallocation of labor input across firms within an industry and productivity improvement of firms make positive contributions to the productivity growth.