Structural Change and Service-led Growth in India

Philippe Aghion, Fabrizio Zilibotti, Michael Peters and Robin Burgess
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Philippe Aghion: LSE
Fabrizio Zilibotti: Yale Univerity
Michael Peters: Yale University

No 393, 2019 Meeting Papers from Society for Economic Dynamics

Abstract: In the last 30 years, India grew substantially, agricultural employment declined markedly, manufacturing employment did not change much but consumer service employment increased rapidly. In the cross-section of Indian districts we also a find a strong correlation between income per capita and the employment share in consumer services. We use micro data on expenditures shares, regional data on employment shares and income per capita and a spatial model of structural change to infer the underlying reasons for these patterns. Our exercise implies that productivity growth in consumer services account for .... % of aggregate productivity growth in India. We also show that differences in consumer service growth across Indian districts account for ...\% of the observed change in spatial inequality.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:393

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