Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229259
Authors: 
Alisjahbana, Armida S.
Kim, Kyunghoon
Sen, Kunal
Sumner, Andrew
Yusuf, Arief Anshory
Year of Publication: 
2020
Series/Report no.: 
WIDER Working Paper No. 2020/35
Abstract: 
This paper discusses the 'developer's dilemma' - a tension emerging from the fact that developing countries are simultaneously seeking structural transformation and broad-based growth to raise incomes of the poor. Simon Kuznets originally hypothesized that structural transformation may have a tendency - in the absence of policy intervention - to put upward pressure on income inequality. However, broad-based economic growth requires steady or even falling income inequality to maximize the growth of incomes at the lower end of the distribution. The purpose of our paper is: (i) to revisit the seminal Kuznets paper in order to understand how Kuznets understood the structural transformation and income inequality relationship precisely; (ii) to discuss the empirical experience of the developing world in terms of structural transformation and, in doing so, to outline a typology of 'varieties' of structural transformation; and (iii) to discuss the structural transformation-inequality relationship and how it may differ under different patterns of structural transformation.
Subjects: 
income inequality
structural transformation
economic development
Kuznets
Lewis
JEL: 
D6
L16
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-792-7
Document Type: 
Working Paper

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