Varieties of structural transformation: Macro drivers, wage inequality, and labour market outcomes

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    Project Manager :
    Dominik ETIENNE

    Structural transformation – the movement of workers from low productivity to high productivity activities and sectors – is an essential feature of rapid and sustained growth. Many developing countries that have succeeded in rapid and sustained economic growth have experienced ‘traditional’ or “old” structural transformation, meaning industrialization. This traditional pathway to economic development is becoming more challenging to sustain for low-income and middle-income developing countries as more countries compete over a place in global value chains. Further, in several middle income developing countries a ‘new’ form of structural transformation, tertiarization, is evident. At the same time the world’s poorest countries have yet to embark on industrialization and are experiencing instead a shift from agriculture to services, or premature deindustrialisation. In light of these contemporary patterns the project will focus on the different varieties of structural transformation, the macro-drivers of different varieties of structural transformation and the labour market and employment outcomes including wage inequality of different varieties of structural transformation. 

    The project will address the following research questions:

    What are the drivers of the ”new” forms of structural transformation versus the ”old”? Can tertiarization and premature deindustrialisation be reversed?
    What are the possibilities for sustained growth with new forms of structural transformation? What the implications of labour saving technical change?
    What are the jobs and livelihoods implications of the old and new forms of structural transformation for women and disadvantaged groups in particular? What are the poverty and inequality dynamics?

    The research will address Goal 5 on Gender Equality, Goal on Decent Work and Economic Growth and Goal 10 on Reduced Inequalities in the 2030 Agenda.

    The project consists of three sub-components:

    1. Macro drivers of structural transformation

    2. The developer’s dilemma: structural transformation, inequality, and inclusive growth

    3. The labour market effects of structural transformation 

    All sub-components will deliver a series of academic outputs, such as a book monograph, WIDER Working Papers, and special issues of journals.