The Human Side of Structural Transformation
We document that nearly half of the global decline in agricultural employment during the 20th-century was driven by new cohorts entering the labor market. A newly compiled dataset of policy reforms supports an interpretation of these cohort effects as human capital. Through the lens of a model of frictional labor reallocation, we conclude that human capital growth, both as a mediating factor and as an independent driver, led to a sharp decline in the agricultural labor supply. This decline accounts, at fixed prices, for 40% of the decrease in agricultural employment. This aggregate effect is roughly halved in general equilibrium.
Published Versions
Tommaso Porzio & Federico Rossi & Gabriella Santangelo, 2022. "The Human Side of Structural Transformation," American Economic Review, vol 112(8), pages 2774-2814.
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