​Abstract

​

The transition from low-income developing country to high-income developed country involves a deep process of structural transformation in which the productive structure of an economy changes.

This paper identifies the pattern of structural change that countries experience as they catch up from low income levels to the economic frontier, and examines how structural change contributes to both labor and total factor productivity. Using data for Asian countries the paper goes on to address the extent and form of structural change and its contribution to productivity growth since 1990, asking what order of magnitude the productivity effects are likely to be as Asian countries converge to the economic structure that characterizes middle-income and high-income countries.