Structural Change in a Multi-Sector Model of Growth

L. Rachel Ngai and Christopher Pissarides

No 1800, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study a multi-sector model of growth with differences in TFP growth rates across sectors and derive sufficient conditions for the coexistence of structural change, characterized by sectoral labor reallocation, and balanced aggregate growth. The conditions are weak restrictions on the utility and production functions commonly applied by macroeconomists. Per capita output grows at the rate of labor-augmenting technological progress in the capital-producing sector and employment moves to low-growth sectors. In the limit all employment converges to two sectors, the slowest-growing consumption-goods sector and the capital-goods sector.

Keywords: unbalanced growth; sectoral employment; structural change; balanced growth; multi-sector growth (search for similar items in EconPapers)
JEL-codes: O14 O41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2005-10
New Economics Papers: this item is included in nep-dev and nep-dge
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Citations: View citations in EconPapers (21)

Published - published in: American Economic Review, 2007, 97 (1), 429-443

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Related works:
Journal Article: Structural Change in a Multisector Model of Growth (2007)
Working Paper: Structural change in a multi-sector model of growth (2007)
Working Paper: Structural change in a multi-sector model of growth (2005)
Working Paper: Structural Change in a Multi-Sector Model of Growth (2004)
Working Paper: Structural change in a multi-sector model of growth (2004)
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