How has Globalization Affected the Economic Growth, Structural Change, and Poverty Reduction Linkages?

This chapter focuses on the complex relationships between structural change on the one hand and employment creation and poverty reduction on the other hand. It argues that globalization may have ambiguous effects on the relationships between growth and structural change by distorting domestic intersectoral linkages in the developing economies. As a result, structural change accompanied by the growth of output may not necessarily create additional employment and contribute to reductions in poverty. The key hypothesis of the chapter is that if economic growth is accompanied by productivity-enhancing structural change, it serves to generate high-productivity employment and ensures poverty reduction. The empirical results provide weak support for the hypothesis.