publication . Preprint . Article . 2014

Structural change accounting with labor market distortions

Wenbiao Cai;
Open Access
  • Published: 01 Oct 2014
This paper quantifies the relative importance of sectoral productivity and labor market distortions for structural change in the U.S., India, Mexico and Brazil between 1960 and 2005. I use census data to compute human capital by sector and infer labor market distortions as sectoral gaps in wage per unit of human capital. I incorporate these distortions into a model of structural change, and calibrate the model to reproduce the time paths of sectoral shares of labor and value added for each country. Counterfactuals reveal that (1) TFP growth in agriculture drives most of the decline in its share of labor; (2) the role of labor market distortions is limited.
free text keywords: Economics and Econometrics, Control and Optimization, Applied Mathematics, Agriculture, business.industry, business, Counterfactual conditional, Human capital, Economics, Labour economics, Total factor productivity, Wage, media_common.quotation_subject, media_common, Structural change
Related Organizations
37 references, page 1 of 3

Acemoglu, D. and V. Guerrieri (2008). Capital Deepening and Nonbalanced Economic Growth. Journal of Political Economy 116(3), 467-498.

Alvarez-Cuadrado, F. and M. Poschke (2011). Structural Change Out of Agriculture: Labor Push versus Labor Pull. American Economic Journal: Macroeconomics 3(3), 127-58.

Atkeson, A. and M. Ogaki (1996). Wealth-varying Intertemporal Elasticities of Substitution: Evidence from Panel and Aggregate Data. Journal of Monetary Economics 38(3), 507 - 534. [OpenAIRE]

Besley, T. and R. Burgess (2004). Can Labor Regulation Hinder Economic Performance? Evidence from India. The Quarterly Journal of Economics 119(1), 91-134.

Betts, C. M., R. Giri, and R. Verma (2013). Trade, Reform, and Structural Transformation in South Korea. Working Paper, University of Southern California.

Buera, F. J. and J. P. Kaboski (2009). Can Traditional Theories of Structural Change Fit the Data? Journal of the European Economic Association 7(2-3), 469-477.

Cai, W. and M. Pandey (2013a). The Agricultural Productivity Gap in Europe. DeCai, W. and M. Pandey (2013b). Size-Dependent Labor Regulations and Structural Transformation in India. Economics Letters 119(3), 272-275.

Cao, K. H. and J. A. Birchenall (2013). Agricultural productivity, structural change, and economic growth in post-reform China. Journal of Development Economics 104, 165-180. [OpenAIRE]

Caselli, F. (2005). Accounting For Cross Country Income Differences. In P. Aghion and S. D. Durlauf (Eds.), Handbook of Economic Growth, pp. 679-741. ELSEVIER.

Chari, V. V., P. J. Kehoe, and E. R. McGrattan (2007). Business cycle accounting. Econometrica 75(3). [OpenAIRE]

Cheremukhin, A., M. Golosov, S. Guriev, and A. Tsyvinski (2013, September). Was Stalin Necessary for Russia's Economic Development? Working Paper 19425, National Bureau of Economic Research. [OpenAIRE]

Cheremukhin, A., M. Golosov, S. Guriev, and A. Tsyvinski (2014). The Economy of People's Republic of China from 1953. Working paper, Federal Reserve Bank of Dallas. [OpenAIRE]

Dekle, R. and G. Vandenbroucke (2012). A Quantitative Analysis of China's Structural Transformation. Journal of Economic Dynamics and Control 36(1), 119-135.

Dennis, B. N. and T. B. Iscan (2009). Engel versus Baumol: Accounting for structural change using two centuries of U.S. data. Explorations in Economic History 46(2), 186-202.

Duarte, M. and D. Restuccia (2010). The Role of the Structural Transformation in Aggregate Productivity. The Quarterly Journal of Economics 125(1), 129-173.

37 references, page 1 of 3
Any information missing or wrong?Report an Issue