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Spatial Structural Change

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Abstract

Between 1880 and 1920, the US agricultural employment share fell from 50% to 25%. However, despite aggregate demand shifting away from their sector of specialization, rural labor markets saw faster wage growth and industrialization than non-agricultural parts of the US. We propose a spatial model of the structural transformation to analyze the link between aggregate structural change and local economic development. The calibrated model shows that rural areas adapted to the decline of the agricultural sector by adopting technologies already in use in urban locations. Without such catchup growth, economic development would have been urban-biased and spatial inequality would have increased.

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  • Fabian Eckert & Michael Peters, 2022. "Spatial Structural Change," Opportunity and Inclusive Growth Institute Working Papers 063, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmoi:95875
    DOI: 10.21034/iwp.63
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    Cited by:

    1. Chen, Natalie & Novy, Dennis & Perroni, Carlo & Wong, Horng Chern, 2023. "Urban-biased structural change," LSE Research Online Documents on Economics 121286, London School of Economics and Political Science, LSE Library.
    2. Xiameng Pan & Chang Sun, 2023. "Internal Migration, Remittances and Economic Development," CESifo Working Paper Series 10623, CESifo.
    3. Tianyu Fan & Michael Peters & Fabrizio Zilibotti, 2023. "Growing Like India—the Unequal Effects of Service‐Led Growth," Econometrica, Econometric Society, vol. 91(4), pages 1457-1494, July.
    4. Cao, Huoqing & Chen, Shiyi & Xi, Xican, 2023. "Aging, migration, and structural transformation in China," Economic Modelling, Elsevier, vol. 126(C).

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    More about this item

    Keywords

    Structural change; Industrial structure; Economic geography; Growth;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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