Income Distribution and Structural Transformation: Empirical Evidence from Developed and Developing Countries

The process of structural transformation forms the very basis of economic growth and development. This paper analyses the implications of alternate patterns of structural change for changes in the overall distribution of income within an economy. An empirical analysis is carried out based on evidence from seventy-eight developing and transition economies and developed countries. The estimated results from a fixed effects panel data model, indicate the existence of substantial differences as well as important similarities between developed and developing country experience with respect to structural change and associated changes in income inequality.