Publication Date: August 2020
Update Date: April 2022
Industrialization experiences diﬀer substantially across countries. We use a
benchmark model of structural change to shed light on the sources of this heterogeneity
and, in particular, the phenomenon of premature deindustrialization. Our
analysis leads to three key ﬁndings. First, benchmark models of structural change
robustly generate hump-shaped patterns for the evolution of the industrial sector.
Second, heterogeneous patterns of catch-up in sectoral productivities across countries
can generate variation in industrialization experiences similar to those found
in the data, including premature deindustrialization. Third, diﬀerences in the rate
of agricultural productivity growth across economies can account for the majority
of the variation in peak industrial employment shares.
Keywords: Structural transformation, Productivity growth, Industrialization
JEL Classification Codes: E24, O11, O13, O14, O33, O41