Working Paper: NBER ID: w31905
Authors: Douglas Gollin; Joseph P. Kaboski
Abstract: This paper describes an emerging literature in economics that aims to merge macro issues of structural change and growth with micro data and analysis. This literature focuses on a set of related patterns of change that accompany the processes of growth and development. Traditionally, the focus has been on industrialization – and more broadly the reallocation of employment and economic activity from agriculture to manufacturing and services. The new literature considers a broader set of transformations: from rural to urban, from home to market (and from market to home), from informal to formal, and from self-employment to wage work. Drawing on new data sources, including micro data and administrative records, the literature tries to understand the complex interactions of a broad set of market failures, policy distortions, and impediments to the growth process. In broadening the understanding of structural transformation – to encompass processes beyond industrialization – this literature opens the door to a richer understanding of the processes of growth and a wider set of potential levers for policy.
Keywords: structural transformation; economic growth; development economics; market failures; policy distortions
JEL Codes: O10; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| shifts in labor from agriculture to manufacturing (O14) | economic growth (O49) |
| shifts in labor from agriculture to services (F66) | economic growth (O49) |
| structural changes (L16) | economic growth (O49) |
| movements of people from rural to urban areas (R23) | shifts in labor from agriculture to manufacturing (O14) |
| movements of people from rural to urban areas (R23) | shifts in labor from agriculture to services (F66) |
| changes in firm size from self-employment to larger enterprises (L26) | shifts in labor from agriculture to manufacturing (O14) |
| changes in firm size from self-employment to larger enterprises (L26) | shifts in labor from agriculture to services (F66) |
| shifts in economic activity from informal to formal sectors (O17) | economic growth (O49) |