Having emphasized that each of the three measures of economic activity at the sectoral levelis distinct, we also want to note that each of them has its limitations as a singular measure. Forthe case of sectoral employment shares, a key issue is that employment may not reflect changesin “true” labor input, for example, because there are systematic differences in hours worked orin human capital per worker across sectors that vary with the level of development. For thecase of value added and consumption expenditure shares, a key issue arises from the need todistinguish between changes in quantities and prices. This is often difficult empirically becausereliable data on relative price comparisons across countries are hard to come by. In addition,consumption and production need not coincide because of the presence of investment and ofimports and exports, so that neither measure alone is sufficient.2.2Production Measures of Structural TransformationIn this subsection we document the patterns of structural transformation based on examiningproduction measures in several different data sets. We first review the available historical time7
Figure 1: Sectoral Shares of Employment and Value Added –Selected Developed Countries 1800–2000Employment0.00.10.20.126.96.36.199.70.86.06.57.07.58.08.59.09.510.0 10.5 11.0AgricultureShare in total employmentLog of GDP per capita (1990 international $)0.00.10.20.188.8.131.52.70.86.06.57.07.58.08.59.09.510.0 10.5 11.0ManufacturingShare in total employmentLog of GDP per capita (1990 international $)0.00.10.20.184.108.40.206.70.86.06.57.07.58.08.59.09.510.0 10.5 11.0ServicesShare in total employmentLog of GDP per capita (1990 international $)Value added0.00.10.20.220.127.116.11.70.86.06.57.07.58.08.59.09.510.0 10.5 11.0AgricultureShare in value added (current prices)Log of GDP per capita (1990 international $)0.00.10.20.18.104.22.168.70.86.06.57.07.58.08.59.09.510.0 10.5 11.06.57.07.58.08.59.09.510.010.5ManufacturingShare in value added (current prices)Log of GDP per capita (1990 international $)0.00.10.20.22.214.171.124.70.86.06.57.07.58.08.59.09.510.0 10.5 11.06.57.07.58.08.59.09.510.010.5ServicesShare in value added (current prices)Log of GDP per capita (1990 international $)BelgiumSpainFinlandFranceJapanKoreaNetherlandSwedenUnited KingdomUnited StatesSource:Various historical statistics, see Appendix A.8
series evidence for currently rich economies. We then turn to the evidence for currently richand poor countries.2.2.1Evidence from Long Time Series for Currently Rich CountriesWe construct individual time series of sectoral employment shares and value added shares overthe 19thand 20thcentury for the following ten countries: Belgium, Finland, France, Japan,Korea, Netherlands, Spain, Sweden, United Kingdom and United States.7Since the early data issketchy and we want to highlight trends over long periods of time, we report the latest availableobservation for each decade, if any. We note that for these historical time series we only havemeasures based on production.
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