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Structural Transformation by Cohort

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  • Todd Schoellman

    (Arizona State University)

  • Bart Hobijn

    (ASU)

Abstract

This paper documents the facts of which workers are reallocated across sectors during the process of structural transformation using repeated cross-sectional microdata covering 47 countries at all levels of development. The key finding is that structural transformation affects primarily the young. More than half of all structural transformation happens between cohorts, meaning that new cohorts choose different sectors than existing ones. Half of the within-cohort reallocation happens by age 30 and most by age 40. We develop and calibrate an overlapping generations model of structural transformation with sector-specific human capital investments that replicates these and other stylized facts. The model generates much slower transitional dynamics than the standard growth model even in the face of a large, one-time shock to TFP.

Suggested Citation

  • Todd Schoellman & Bart Hobijn, 2017. "Structural Transformation by Cohort," 2017 Meeting Papers 1417, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:1417
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    Cited by:

    1. Porzio, Tommaso & Santangelo, Gabriella, 2017. "Human Capital and Structural Change," University of California at San Diego, Economics Working Paper Series qt1ws4x2fg, Department of Economics, UC San Diego.
    2. Fabian Eckert & Michael Peters, 2018. "Spatial Structural Change," 2018 Meeting Papers 98, Society for Economic Dynamics.
    3. Porzio, Tommaso & Santangelo, Gabriella, 2017. "Structural Change and the Supply of Agricultural Workers," CEPR Discussion Papers 12495, C.E.P.R. Discussion Papers.

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