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The Geography of Structural Transformation: Effects on Inequality and Mobility

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  • Takeda, Kohei

    (National University of Singapore)

Abstract

Economies transform at an uneven pace. This paper develops a dynamic overlapping generations model of economic geography where historical exposure to different industries creates persistence in occupational structure, and non-homothetic preferences and differential productivity spillovers lead to different rates of structural transformation. The model is calibrated to the U.S. economy from 1980 to 2010. The calibration allows us to back out measures of upward mobility and inequality, thereby providing theoretical underpinnings for the Great Gatsby Curve. The counterfactual analysis reveals that structural transformation has substantial effects on a slowdown and explains heterogeneity in upward mobility across cities.

Suggested Citation

  • Takeda, Kohei, 2023. "The Geography of Structural Transformation: Effects on Inequality and Mobility," OSF Preprints 8nfx5_v1, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:8nfx5_v1
    DOI: 10.31219/osf.io/8nfx5_v1
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