Variation in structural change around the world, 1985–2015: Patterns, causes and implications

Abstract

During 1985During -2015 intensified the factor-endowment-related pattern of sectoral specialization. In skill-abundant developed countries, manufacturing became more skillintensive. In land-scarce developing East Asia, labour-intensive manufacturing expanded, especially in China. In land-abundant developing regions, however, manufacturing stagnated or declined, while in land-scarce South Asia manufacturing was held back by low literacy and weak infrastructure. The shares of service sectors in output and employment increased in most countries, but mainly for reasons unrelated to globalization. Changes in sectoral structure in the decades ahead are subject to much uncertainty, but will continue to be shaped by differences among countries in land abundance and skill supplies.

The 1990s trade and wages debate in retrospect

“…Standard HO theory, however, is only part of the explanation. As also shown in Wood (), relationships between endowments and comparative advantage shifted during this period in ways that suggest amplification by transfer of technology from the North of the comparative advantage in labour‐intensive manufacturing of Southern countries with suitable endowments. This transfer reflects the offshoring of tasks modelled, for example, by Grossman and Rossi‐Hansberg () and Baldwin and Robert‐Nicoud ().…”

“…The insights of HO theory are vital to understanding how the world has evolved over the past few decades. As shown in Wood (), changes in the structure of trade, production and employment during this period of globalisation have varied among regions and countries in ways that correspond with the comparative advantages predicted by their factor endowments. Among other changes, the skill‐abundant North has become more specialised in skill‐intensive manufacturing, with corresponding specialisation in labour‐intensive manufacturing in land‐scarce and skill‐scarce Southern countries with good infrastructure and political stability.…”

“… Calculated from the data for Wood (). The absolute falls are similar in size, whether the OECD is defined in terms of its membership in 1990 or in 2014, though 50% larger for the narrower North relative to end‐period manufacturing employment. …”

Structural Change and Development in India

“…Indeed, trade in these services is now growing faster than trade in goods (cf. Loungani et al, 2017; Wood, 2017). In these circumstances, it is claimed that services can lead the growth process in low-income economies of today just as well as manufacturing did in the early developers (cf.…”

“…18.Wood (2017) has argued that globalisation intensified the factor-endowment-related pattern of sectoral specialisation. In land-scarce developing East Asia, labour-intensive manufacturing expanded.…”