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Structural change and income inequality: Evidence from Thailand

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  • Warr, Peter
  • Yusuf, Arief Anshory

Abstract

Structural change means a long-term change in the composition of economic output: agriculture, industry and services. First, we describe this process in the context of Thailand. Second, we analyse its causes using a simple, comparative static computable general equilibrium model of the Thai economy, operated in long-run mode. We test the explanatory power of three hypotheses about the causes of structural change: differences in the growth rates of aggregate factor supplies; sectoral differences in total factor productivity growth; and the differences between commodities in expenditure elasticities of demand. Third, we use the above framework to study the impact these drivers of structural change have on the functional distribution of incomes. The results show that the explanators of structural change do not predict the observed changes in factor income shares. We conclude that these two phenomena have different drivers and that stable empirical relationships between them should not be expected.

Suggested Citation

  • Warr, Peter & Yusuf, Arief Anshory, 2026. "Structural change and income inequality: Evidence from Thailand," Structural Change and Economic Dynamics, Elsevier, vol. 79(C), pages 65-79.
    • Handle: RePEc:eee:streco:v:79:y:2026:i:c:p:65-79
    DOI: 10.1016/j.strueco.2026.04.011
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