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The Human Side of Structural Transformation

Author

Listed:
  • Tommaso Porzio
  • Federico Rossi
  • Gabriella Santangelo

Abstract

We document that nearly half of the global decline in agricultural employment was driven by new cohorts entering the labor market. A new dataset of policy reforms supports an interpretation of these cohort effects as human capital. Using a model of frictional labor reallocation, we conclude that human capital growth led to a sharp decline in the agricultural labor supply, accounting, at fixed prices, for 40 percent of the decrease in agricultural employment. This aggregate effect is halved in general equilibrium and it reflects the role of human capital as both a mediating factor and an independent driver of labor reallocation.

Suggested Citation

  • Tommaso Porzio & Federico Rossi & Gabriella Santangelo, 2022. "The Human Side of Structural Transformation," American Economic Review, American Economic Association, vol. 112(8), pages 2774-2814, August.
    • Handle: RePEc:aea:aecrev:v:112:y:2022:i:8:p:2774-2814
    DOI: 10.1257/aer.20201157
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    Citations

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    Cited by:

    1. Cao, Huoqing & Chen, Shiyi & Xi, Xican, 2023. "Aging, migration, and structural transformation in China," Economic Modelling, Elsevier, vol. 126(C).
    2. Fally, Thibault & Bergquist, Lauren & Faber, Benjamin & Hoelzlein, Matthias & Miguel, Edward & Rodríguez-Clare, Andres, 2022. "Scaling Agricultural Policy Interventions," CEPR Discussion Papers 17737, C.E.P.R. Discussion Papers.
    3. Tasso Adamopoulos & Loren Brandt & Chaoran Chen & Diego Restuccia & Xiaoyun Wei, 2022. "Land Security and Mobility Frictions," NBER Working Papers 29666, National Bureau of Economic Research, Inc.
    4. Fabian Eckert & Michael Peters, 2018. "Spatial Structural Change," 2018 Meeting Papers 98, Society for Economic Dynamics.
    5. Ma, Xiao & Nakab, Alejandro & Zhang, Yiran, 2023. "Skill Acquisition and the Gains from Trade: A Cross-country Quantitative Analysis," MPRA Paper 117808, University Library of Munich, Germany.
    6. Jadranka Deže & Tihana Sudarić & Ljubica Ranogajec, 2023. "Agri-Entrepreneurship: Measurement and Evaluation of Intellectual Capital Potential," Central European Business Review, Prague University of Economics and Business, vol. 2023(5), pages 71-92.

    More about this item

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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