Working Paper: NBER ID: w27580
Authors: Federico Huneeus; Richard Rogerson
Abstract: Industrialization experiences differ substantially across countries. We use a benchmark model of structural change to shed light on the sources of this heterogeneity and, in particular, the phenomenon of premature deindustrialization. Our analysis leads to three key findings. First, benchmark models of structural change robustly generate hump-shaped patterns for the evolution of the industrial sector. Second, heterogeneous patterns of catch-up in sectoral productivities across countries can generate variation in industrialization experiences similar to those found in the data, including premature deindustrialization. Third, differences in the rate of agricultural productivity growth across economies can account for the majority of the variation in peak industrial employment shares.
Keywords: Industrialization; Structural Change; Premature Deindustrialization
JEL Codes: E24; O11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic development stages (O11) | employment share in manufacturing (L60) |
| structural change (L16) | industrialization phases (O14) |
| agricultural productivity growth (O49) | peak industrial employment shares (J69) |
| agricultural productivity growth (O49) | industrialization outcomes (L52) |
| productivity growth rates (O49) | industrialization experiences (O14) |