Structural Transformation and Inequality: A Sectoral Analysis for Low- and Middle-income Countries

Margaret Rutendo Magwedere and Godfrey Marozva
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Margaret Rutendo Magwedere: University of South Africa
Godfrey Marozva: University of South Africa

Review of Economic Analysis, 2024, vol. 16, issue 4, 423-441

Abstract: "The study examined the impact of structural transformation to inequality using a panel of low- and middle-income countries from 1996 - 2018. The system generalised method of moments was used to determine the effect of value-added of each sector to income inequality for the countries in the study. Increase in value-added for the mining and construction sectors reduces inequality whilst inequality increased with an increase in value-added for the agriculture and manufacturing sectors. Thus, for the countries in this study mining and construction driven structural transformation has an inequality reducing effect whereas there is a possibility that further structural transformation has no effect to reducing inequality. This implies that there is a probability of an increase in inequality due to further structural transformation. The implication for policy is a consideration of a channel of structural transformation that is suitable for a specific economy."

Keywords: "inequality; structural transformation; change; sector; countries; income distribution; system-GMM; value-added; development" (search for similar items in EconPapers)
JEL-codes: O15 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ren:journl:v:16:y:2024:i:4:p:423-441

DOI: 10.15353/rea.v16i4.5419

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