Suppose there are two sectors, call them A [agriculture] and M [manufacturing]. People earn say $5 an hour in agriculture and $10 an hour in manufacturing. Suppose we are interested in the share of the bottom 40% and the richest 20%. Let x be the share of people in manufacturing. Derive a formula that gives you the shares of income earned by the lowest 40% of the population and the richest 20% of the population as a function of x. This is a connection between structural transformation and the behavior of inequality.
Suppose there are two sectors, call them A [agriculture] and M [manufacturing]. People earn say $5 an hour in agriculture and $10 an hour in manufacturing. Suppose we are interested in the share of the bottom 40% and the richest 20%. Let x be the share of people in manufacturing. Derive a formula that gives you the shares of income earned by the lowest 40% of the population and the richest 20% of the population as a function of x. This is a connection between structural transformation and the behavior of inequality.
Chapter1: Making Economics Decisions
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Suppose there are two sectors, call them A [agriculture] and M [manufacturing]. People earn say $5 an hour in agriculture and $10 an hour in manufacturing. Suppose we are interested in the share of the bottom 40% and the richest 20%. Let x be the share of people in manufacturing. Derive a formula that gives you the shares of income earned by the lowest 40% of the population and the richest 20% of the population as a function of x. This is a connection between structural transformation and the behavior of inequality.
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