Growing Like India: The Unequal Effects of Service-Led Growth

Tianyu Fan, Michael Peters and Fabrizio Zilibotti

No 28551, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Structural transformation in most currently developing countries takes the form of a rapid rise in services but limited industrialization. In this paper, we propose a new methodology to structurally estimate productivity growth in service industries that circumvents the notorious difficulties in measuring quality improvements. In our theory, the expansion of the service sector is both a consequence—due to income effects—and a cause— due to productivity growth—of the development process. We estimate the model using Indian household data. We find that productivity growth in non-tradable consumer services such as retail, restaurants, or residential real estate, was an important driver of structural transformation and rising living standards between 1987 and 2011. However, the welfare gains were heavily skewed toward high-income urban dwellers.

JEL-codes: O1 O18 O4 O41 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-cwa
Note: DEV EFG
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published as "Growing Like India: The Unequal Effects of Service-Led Growth", Econometrica, 2023

Downloads: (external link)
http://www.nber.org/papers/w28551.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:28551

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w28551

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().