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The Human Side of Structural Transformation

Author

Listed:
  • Porzio, Tommaso

    (Columbia Unversity and CEPR)

  • Rossi, Federico

    (University of Warwick)

  • Santangelo, Gabriella

    (University of Cambridge)

Abstract

We show that the global human capital increase during the 20th - century contributed to structural transformation. We document that almost half of the decline in aggregate agricultural employment was driven by new birth cohorts entering the labor market. We use data on educational attainment and compile a comprehensive list of policy reforms to interpret the differences in agricultural employment across cohorts. We find that the increase in schooling led to a sharp reduction in the agricultural labor supply by equipping younger cohorts with skills more valued out of agriculture. Interpreted through a model of frictional labor reallocation, these facts imply that human capital growth accounts for about 20% of the global decline in agricultural employment. JEL codes: J24 ; J43 ; J62 ; L16 ; O11 ; O14 ; O18 ; O41 ; Q11

Suggested Citation

  • Porzio, Tommaso & Rossi, Federico & Santangelo, Gabriella, 2020. "The Human Side of Structural Transformation," The Warwick Economics Research Paper Series (TWERPS) 1297, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1297
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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