Abstract
This chapter addresses the relationship between structural change and the income distribution. It raises the question of whether structural change increases or decreases income inequality. The chapter presents a multi-sectoral model in the so-called canonical modelling tradition. In this model the distributional outcomes depend on the mix of the labour supply in different technology classes and skill biases in technological change. Whether structural change has an effect depends on the specific country. When it does have an effect, it mainly benefits high-skilled labour. The skill premium for high-skilled labour thus contributes to increased income inequality. Both the relative supply of skills and skill-based technological change tend to increase income inequality, though not in all countries.
Original language | English |
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Title of host publication | New Perspectives on Structural Change: Causes and Consequences of Structural Change in the Global Economy |
Publisher | Oxford University Press |
Pages | 577-595 |
Number of pages | 19 |
ISBN (Print) | 9780198850113 |
DOIs | |
Publication status | Published - 2021 |
JEL classifications
- o15 - "Economic Development: Human Resources; Human Development; Income Distribution; Migration"