Having emphasized that each of the three measures of economic activity at the

Having emphasized that each of the three measures of

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Having emphasized that each of the three measures of economic activity at the sectoral level is distinct, we also want to note that each of them has its limitations as a singular measure. For the case of sectoral employment shares, a key issue is that employment may not reflect changes in “true” labor input, for example, because there are systematic di ff erences in hours worked or in human capital per worker across sectors that vary with the level of development. For the case of value added and consumption expenditure shares, a key issue arises from the need to distinguish between changes in quantities and prices. This is often di ffi cult empirically because reliable 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 of imports and exports, so that neither measure alone is su ffi cient. 2.2 Production Measures of Structural Transformation In this subsection we document the patterns of structural transformation based on examining production measures in several di ff erent data sets. We first review the available historical time 7
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Figure 1: Sectoral Shares of Employment and Value Added – Selected Developed Countries 1800–2000 Employment 0 . 0 0 . 1 0 . 2 0 . 3 0 . 4 0 . 5 0 . 6 0 . 7 0 . 8 6 . 0 6 . 5 7 . 0 7 . 5 8 . 0 8 . 5 9 . 0 9 . 5 10 . 0 10 . 5 11 . 0 Agriculture Share in total employment Log of GDP per capita (1990 international $) 0 . 0 0 . 1 0 . 2 0 . 3 0 . 4 0 . 5 0 . 6 0 . 7 0 . 8 6 . 0 6 . 5 7 . 0 7 . 5 8 . 0 8 . 5 9 . 0 9 . 5 10 . 0 10 . 5 11 . 0 Manufacturing Share in total employment Log of GDP per capita (1990 international $) 0 . 0 0 . 1 0 . 2 0 . 3 0 . 4 0 . 5 0 . 6 0 . 7 0 . 8 6 . 0 6 . 5 7 . 0 7 . 5 8 . 0 8 . 5 9 . 0 9 . 5 10 . 0 10 . 5 11 . 0 Services Share in total employment Log of GDP per capita (1990 international $) Value added 0 . 0 0 . 1 0 . 2 0 . 3 0 . 4 0 . 5 0 . 6 0 . 7 0 . 8 6 . 0 6 . 5 7 . 0 7 . 5 8 . 0 8 . 5 9 . 0 9 . 5 10 . 0 10 . 5 11 . 0 Agriculture Share in value added (current prices) Log of GDP per capita (1990 international $) 0 . 0 0 . 1 0 . 2 0 . 3 0 . 4 0 . 5 0 . 6 0 . 7 0 . 8 6 . 0 6 . 5 7 . 0 7 . 5 8 . 0 8 . 5 9 . 0 9 . 5 10 . 0 10 . 5 11 . 0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 Manufacturing Share in value added (current prices) Log of GDP per capita (1990 international $) 0 . 0 0 . 1 0 . 2 0 . 3 0 . 4 0 . 5 0 . 6 0 . 7 0 . 8 6 . 0 6 . 5 7 . 0 7 . 5 8 . 0 8 . 5 9 . 0 9 . 5 10 . 0 10 . 5 11 . 0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 Services Share in value added (current prices) Log of GDP per capita (1990 international $) Belgium Spain Finland France Japan Korea Netherland Sweden United Kingdom United States Source: Various historical statistics, see Appendix A. 8
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series evidence for currently rich economies. We then turn to the evidence for currently rich and poor countries. 2.2.1 Evidence from Long Time Series for Currently Rich Countries We construct individual time series of sectoral employment shares and value added shares over the 19 th and 20 th century for the following ten countries: Belgium, Finland, France, Japan, Korea, Netherlands, Spain, Sweden, United Kingdom and United States. 7 Since the early data is sketchy and we want to highlight trends over long periods of time, we report the latest available observation for each decade, if any. We note that for these historical time series we only have measures based on production.
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