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Varieties of structural transformation - macro drivers, wage inequality, and labour market outcomes

Structural transformation — the movement of workers from low-productivity to high-productivity activities and sectors — is an essential feature of rapid and sustained growth. This traditional pathway to economic development is becoming more challenging to sustain for low- and middle-income developing countries as more countries compete over a place in global value chains.

This project looks at the challenges low- and middle-income countries are experiencing with ‘new’ forms of structural transformation, including tertiarization and premature deindustrialization. In light of these contemporary patterns the project will focus on producing knowledge and policy alternatives addressing the challenges of different varieties of structural transformation. This includes looking into 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.

Key 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 are 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?

Watch this space

The research agenda for the project will be developed at project inception workshops in March 2019, in Helsinki and Cape Town. A set of papers that address the structural transformation–inclusive growth relationship will be presented at panels at the WIDER Development Conference Transforming Economies - Better Jobs, in September 2019, subsequently published as an edited volume. Another set of papers that address the macro drivers of structural transformation and the effect of structural transformation on wage inequality will be published as WIDER working papers, and considered for inclusion in special issues of field journals.

UN’s 2030 Agenda for Sustainable Development

The research will address Goal 5  (Gender Equality), Goal 8 (Decent Work and Economic Growth), and Goal 10 (Reduced Inequalities).


Main subject

Theme: Current programme