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Life During Structural Transformation

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  • Jonathan Temple
  • Huikang Ying

Abstract

We examine whether structural transformation leads to a Kuznets curve. We present a dynamic general equilibrium model with heterogeneous workers, occupational self-selection and selective migration, and calibrate the model to survey data for Malawi. We show that structural transformation raises living standards unevenly. As development proceeds, the movement of workers from agriculture is associated with rising wage inequality, rather than a Kuznets curve. The increase in sectoral wage inequality is pronounced for agriculture. At the same time, structural transformation is associated with major reductions in rural poverty, and eventually in urban poverty.

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  • Jonathan Temple & Huikang Ying, 2014. "Life During Structural Transformation," Bristol Economics Discussion Papers 14/650, School of Economics, University of Bristol, UK, revised 08 Dec 2014.
    • Handle: RePEc:bri:uobdis:14/650
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    Cited by:

    1. Luc Christiaensen & Joachim De Weerdt & Ravi Kanbur, 2017. "Cities, towns, and poverty: Migration equilibrium and income distribution in a Todaro-type model with multiple destinations," Working Papers 434, ECINEQ, Society for the Study of Economic Inequality.
    2. Ravi Kanbur & Luc Christiaensen & Joachim De Weerdt, 2019. "Where to create jobs to reduce poverty: cities or towns?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(4), pages 543-564, December.
    3. Jonathan Temple & Huikang Ying & Patrick Carter, 2014. "Transfers and Transformations: Remittances, Foreign Aid, and Growth," Bristol Economics Discussion Papers 14/649, School of Economics, University of Bristol, UK, revised 02 Dec 2014.
    4. Huikang Ying, 2015. "Labour Informality, Selective Migration, and Productivity in General Equilibrium," Bristol Economics Discussion Papers 15/653, School of Economics, University of Bristol, UK.

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    More about this item

    Keywords

    Structural transformation; inequality; Kuznets curve; Roy Model.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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