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Faculty of Economics

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Porzio, T., Rossi, F. and Santangelo, G.

The Human Side of Structural Transformation

American Economic Review

Vol. 112 no. 8 pp. 2774-2814 (2022)

Abstract: We document that nearly half of the global decline in agricultural employment was driven by new cohorts entering the labor market. A new dataset of policy reforms supports an interpretation of these cohort effects as human capital. Using a model of frictional labor reallocation, we conclude that human capital growth led to a sharp decline in the agricultural labor supply, accounting, at fixed prices, for 40 percent of the decrease in agricultural employment. This aggregate effect is halved in general equilibrium and it reflects the role of human capital as both a mediating factor and an independent driver of labor reallocation.

JEL Codes: J22, J24, J43, L16, O13, O14, Q10

Author links: Gabriella Santangelo  

Publisher's Link: https://doi.org/10.1257/aer.20201157



Papers and Publications



Recent Publications


Huffman, D., Raymond, C. and Shvets, J. Persistent Overconfidence and Biased Memory: Evidence from Managers American Economic Review [2022]

Porzio, T., Rossi, F. and Santangelo, G. The Human Side of Structural Transformation American Economic Review [2022]

Mueller, H. and Rauh, C. The Hard Problem of Prediction for Conflict Prevention Journal of the European Economic Association, forthcoming [2022]

Freund, L. B., Lee, H. and Rendahl, P. The Risk-Premium Channel of Uncertainty: Implications for Unemployment and Inflation Review of Economic Dynamics, forthcoming [2023]