Premature Deindustrialization and its Consequences for Human Welfare

Developing Economics

Seagate_Wuxi_China_Factory_Tour.jpegRecent research suggests that late industrializers have not been following previously observed patterns in terms of sectoral change and employment, but the effect of these changing structural patterns on well-being and the distribution of gains from growth has not yet been systematically examined. There is a global shift towards both lower employment in industry at all levels of income per capita and de-industrialization, the shift from manufacturing to service employment, taking place at significantly lower levels of income (See work by Timmer, de Vries, and de Vries; Subramanian; and Rodrik here,here, here and here).

Deindustrialization, Employment Generation, and the “Precarization” of Global Labor
There are many reasons why these new patterns may have negative effects on inclusive development; some recent research emphasizes the important role that periods of high levels of manufacturing employment have played in now wealthy countries, and the dearth of wealthy…

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