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Structural Transformation of Occupation Employment

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  • Georg Duernecker
  • Berthold Herrendorf

Abstract

We use census data to show that structural transformation reflects a fundamental reallocation of labor from goods to services, instead of a relabelling that occurs when goods-producing firms outsource their in-house service production. The novelty of our approach is that it categorizes labor by occupations, which are invariant to outsourcing. We find that the reallocation of labor from goods-producing to service-producing occupations is a robust feature in censuses from around the world and different time periods. To understand the underlying forces, we propose a tractable model in which uneven occupation-specific technological change generates structural transformation of occupation employment.

Suggested Citation

  • Georg Duernecker & Berthold Herrendorf, 2021. "Structural Transformation of Occupation Employment," CESifo Working Paper Series 9321, CESifo.
    • Handle: RePEc:ces:ceswps:_9321
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    Cited by:

    1. Bárány, Zsófia L. & Siegel, Christian, 2020. "Biased technological change and employment reallocation," Labour Economics, Elsevier, vol. 67(C).
    2. Sen, A., 2024. "Structural Change at a Disaggregated Level: Sectoral Heterogeneity Matters," Janeway Institute Working Papers 2410, Faculty of Economics, University of Cambridge.
    3. Xue, Jianpo & Yip, Chong K., 2018. "Home production, balanced-budget taxation and economic (in)stability," Journal of Macroeconomics, Elsevier, vol. 56(C), pages 231-242.
    4. Rana Hasan & Rhea Molato, 2019. "Wages Over the Course of Structural Transformation: Evidence from India," Asian Development Review, MIT Press, vol. 36(2), pages 131-158, September.
    5. Kruse,Hagen & Timmer,Marcel Peter & De Vries,Gaaitzen Johannes & Ye,Xianjia, 2023. "Export Diversification from an Activity Perspective : An Exploration Using Occupation Data," Policy Research Working Paper Series 10463, The World Bank.
    6. Fabio Cerina & Alessio Moro & Michelle Rendall, 2021. "The Role Of Gender In Employment Polarization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(4), pages 1655-1691, November.
    7. repec:hal:spmain:info:hdl:2441/7vl4otetog8c6aaomlbfjid6fp is not listed on IDEAS
    8. Andrés Erosa & Luisa Fuster & Gueorgui Kambourov & Richard Rogerson, 2017. "Hours, Occupations and Gender Differences in Labor Market Outcomes," Working Papers 2017-4, Princeton University. Economics Department..
    9. Zsofia Barany & Christian Siegel, 2021. "Engines of sectoral labor productivity growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 39, pages 304-343, January.
    10. Barany, Zsofia L. & Siegel, Christian, 2017. "Disentangling Occupation- and Sector-specific Technological Change," Economics Series 331, Institute for Advanced Studies.
    11. Paul Gaggl & Aspen Gorry & Christian vom Lehn, 2023. "Structural Change in Production Networks and Economic Growth," CESifo Working Paper Series 10460, CESifo.
    12. Herrendorf, Berthold & Valentinyi, Ákos, 2022. "Endogenous sector–biased technological change and industrial policy," Economic Modelling, Elsevier, vol. 113(C).
    13. Duernecker, Georg & Herrendorf, Berthold, 2018. "On the allocation of time – A quantitative analysis of the roles of taxes and productivities," European Economic Review, Elsevier, vol. 102(C), pages 169-187.
    14. Lee, Tim & Shin, Yongseok, 2017. "Horizonatal and Vertical Polarization: Task-Specific Technological Change in a Multi-Sector Economy," TSE Working Papers 17-800, Toulouse School of Economics (TSE).
    15. Bolhuis, Marijn, 2019. "Catch-Up Growth and Inter-Industry Productivity Spillovers," MPRA Paper 94730, University Library of Munich, Germany.
    16. Andrés Erosa & Luisa Fuster & Gueorgui Kambourov & Richard Rogerson, 2022. "Hours, Occupations, and Gender Differences in Labor Market Outcomes," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(3), pages 543-590, July.
    17. Werner Pena & Christian Siegel, 2023. "Routine-biased technical change, structure of employment, and cross-country income differences," Studies in Economics 2301, School of Economics, University of Kent.
    18. Rubini, Loris & Moro, Alessio, 2019. "Stochastic Structural Change," MPRA Paper 96144, University Library of Munich, Germany.
    19. Orhun Sevinc, 2017. "Skill-Biased Technical Change and Labor Market Polarization: The Role of Skill Heterogeneity Within Occupations," Discussion Papers 1728, Centre for Macroeconomics (CFM).
    20. Bin Xiong & Qi Sui, 2025. "The effect of digital economy on rural workforce occupation transformation ability: Evidence from China," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-15, December.
    21. Todd Schoellman & Bart Hobijn, 2017. "Structural Transformation by Cohort," 2017 Meeting Papers 1417, Society for Economic Dynamics.
    22. repec:spo:wpmain:info:hdl:2441/7vl4otetog8c6aaomlbfjid6fp is not listed on IDEAS

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    More about this item

    Keywords

    biased technological change; occupations; outsourcing; structural transformation;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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