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Working Paper 266 - Structural Transformation and Income Distribution: Kuznets and Beyond
This paper explores the question of structural transformation and income distribution through the eyes of Simon Kuznets, the pioneer in such analysis. It argues that Kuznets’ 1955 paper stands the test of time in that it provides illuminating insights into current phenomena like the evolution of Chinese inequality. The paper shows how the Kuznetsian framework can be used in predicting the differential relationship between urbanization and inequality in India versus China, in assessing the detail of the contribution of sectoral mean and inequality evolution to overall inequality change, and in linking the recent inequality of opportunity literature to rural-urban migration. Thus, the original Kuznetsian framework takes us beyond Kuznets as sometimes (mis)understood in the literature on structural transformation and income distribution.