IDEAS home Printed from
   My bibliography  Save this paper

Structural Change and Poverty Reduction at Sub-State Levels in India


  • Sen Gupta, Abhijit
  • More, Vishal
  • Gupta, Kanupriya


Over the last two decades India has witnessed a significant rise in growth rate compared to historical levels. In this study, we investigate the pattern and nature of growth, and its implication for poverty reduction in India. In particular, we focus on the extent to which, structural change defined as changes in the composition of the economy in terms of key sectors, their employment and productivity, has an impact on poverty reduction. The paper is first of its kind in focusing on these issue at the sub-state level, which is important given the large size of Indian states that mask a great deal of heterogeneity. Moreover, the paper focuses on alternate definitions of structural change, including for the first differentiating between productivity increases in India arising from workers moving into above average productivity level sectors from workers moving to sectors that are experiencing positive productivity growth. The paper finds that while improving sectoral productivity is important for poverty reduction, there is a strong link between shift of workers into sectors witnessing an increase in poverty and poverty reduction. Thus poverty reduction requires generating jobs in dynamic sectors that are witnessing productivity growth as well as imparting adequate skills to the workforce to make them employable in these sectors.

Suggested Citation

  • Sen Gupta, Abhijit & More, Vishal & Gupta, Kanupriya, 2016. "Structural Change and Poverty Reduction at Sub-State Levels in India," MPRA Paper 72740, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:72740

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    1. McMillan, Margaret & Rodrik, Dani & Verduzco-Gallo, Íñigo, 2014. "Globalization, Structural Change, and Productivity Growth, with an Update on Africa," World Development, Elsevier, vol. 63(C), pages 11-32.
    2. Dekle, Robert & Vandenbroucke, Guillaume, 2012. "A quantitative analysis of China's structural transformation," Journal of Economic Dynamics and Control, Elsevier, vol. 36(1), pages 119-135.
    3. World Bank, 2013. "World Development Report 2014
      [Informe sobre el desarrollo mundial 2014, Riesgo y oportunidad : la administración del riesgo como instrumento de desarrollo - Panorama general]
      ," World Bank Publications, The World Bank, number 16092.
    4. Gaaitzen de Vries & Marcel Timmer & Klaas de Vries, 2015. "Structural Transformation in Africa: Static Gains, Dynamic Losses," Journal of Development Studies, Taylor & Francis Journals, vol. 51(6), pages 674-688, June.
    5. Verma, Rubina, 2012. "Can total factor productivity explain value added growth in services?," Journal of Development Economics, Elsevier, vol. 99(1), pages 163-177.
    6. Betts, Caroline & Giri, Rahul & Verma, Rubina, 2013. "Trade, Reform, And Structural Transformation in South Korea," MPRA Paper 49540, University Library of Munich, Germany.
    7. Timothy Besley & Robin Burgess, 2000. "Land Reform, Poverty Reduction, and Growth: Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 115(2), pages 389-430.
    8. Felipe, Jesus & Dacuycuy, Connie & Lanzafame, Matteo, 2014. "The Declining Share of Agricultural Employment in the People’s Republic of China: How Fast?," ADB Economics Working Paper Series 419, Asian Development Bank.
    9. Andreas Dietrich, 2012. "Does growth cause structural change, or is it the other way around? A dynamic panel data analysis for seven OECD countries," Empirical Economics, Springer, vol. 43(3), pages 915-944, December.
    10. Fallon, Peter R. & Lucas, Robert E. B., 1993. "Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe," Journal of Development Economics, Elsevier, vol. 40(2), pages 241-275, April.
    11. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    12. Sen, Kunal, 2016. "The Determinants of Structural Transformation in Asia: A Review of the Literature," ADB Economics Working Paper Series 478, Asian Development Bank.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Structural change; poverty reduction; reallocation effect and labour productivity;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:72740. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.