Premature deindustrialization and income inequality in middle-income countries

This paper examines the income inequality implications of a ‘premature deindustrialization’ trend in middle-income countries. To identify premature deindustrialization phase, we arrive at five conditions based on trends employment and value-added share manufacture. Among these conditions, first second examine pattern economies. The last three classify identified phase as or not. We apply panel fixed-effects bootstrap-corrected dynamic models to empirically relationship between inequality. Our findings suggest that rises with if displaced workers are absorbed into low-productivity informal market services (especially increase non-business such trade, transport, hotels, accommodation activities). In contrast, high-productivity non-market dominant provider, this helps reduce even presence deindustrialization.