Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229409
Authors: 
Ravindran, Rekha
Babu, Suresh M
Year of Publication: 
2021
Series/Report no.: 
WIDER Working Paper No. 2021/8
Abstract: 
This paper examines the income inequality implications of a 'premature deindustrialization' trend in middle-income countries. To identify the premature deindustrialization phase, we arrive at five conditions based on the trends in employment and value-added share of manufacture. Among these five conditions, the first and second examine the deindustrialization pattern in economies. The last three classify the identified deindustrialization phase as premature or not. We apply panel fixed-effects and bootstrap-corrected dynamic fixedeffects models to empirically examine the relationship between premature deindustrialization and income inequality. Our findings suggest that income inequality rises with premature deindustrialization if the displaced workers are absorbed into low-productivity and informal market services (especially with employment increase in non-business market services such as trade, transport, hotels, and accommodation activities). In contrast, if high-productivity nonmarket services are the dominant employment provider, this helps to reduce income inequality even in the presence of premature deindustrialization.
Subjects: 
premature deindustrialization
income inequality
middle-income countries
manufacturing employment
service sector employment
structural transformation
JEL: 
C23
O10
O1
O47
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-942-6
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-sa/3.0/igo/
Document Type: 
Working Paper

Files in This Item:
File
Size
605.63 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.