2020
DOI: 10.1080/00220388.2019.1702161
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Was Kuznets Right? New Evidence on the Relationship between Structural Transformation and Inequality

Abstract: We examine the Kuznets postulate that structural transformation leads to higher inequality using comparable panel data for a large number of developing and developed countries for 1960-2012. Countries are in different stages of structural transformation, being either structurally underdeveloped, structurally developing or structurally developed. In contrast to the Kuznets hypothesis, we find that the movement of workers to manufacturing unambiguously decreases income inequality, irrespective of the stage of st… Show more

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Cited by 56 publications
(58 citation statements)
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References 28 publications
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“…The linear and quadratic terms of service employment share (in Column I) are significant at the 1 per cent level and depict an inverted-U-shaped relationship with net Gini. Baymul and Sen (2020) document a similar relationship between service employment share and income inequality. In Column II, the employment share of market services significantly (at the 1 per cent level) affects income inequality, with the linear and square terms depicting positive and negative relationships.…”
Section: Resultsmentioning
confidence: 78%
See 3 more Smart Citations
“…The linear and quadratic terms of service employment share (in Column I) are significant at the 1 per cent level and depict an inverted-U-shaped relationship with net Gini. Baymul and Sen (2020) document a similar relationship between service employment share and income inequality. In Column II, the employment share of market services significantly (at the 1 per cent level) affects income inequality, with the linear and square terms depicting positive and negative relationships.…”
Section: Resultsmentioning
confidence: 78%
“…Nevertheless, it often brings with it a trade-off between economic growth and income inequality, known as the 'developer's dilemma' (Sumner and London 2017). A recent study by Baymul and Sen (2020) shows that this dilemma (i.e. economic growth results in higher income inequality) occurs when the labour movement is services-driven rather than when it is manufacturing-driven.…”
Section: Discussionmentioning
confidence: 99%
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“…Yet, most of literature tested Kuznets' theory using the share of value-added data, which for the global scale only recently available with 10 sectors, such as reported in the Groningen Growth and Development Centre (GGDC) database (https://www.rug.nl/ggdc). Among the few that use employment share data to test Kuznets are Angeles (2010) and Baymul and Sen (2020).…”
Section: Introductionmentioning
confidence: 99%