How Inclusive is Structural Change; The Case of Selected Asian Countries

Structural change is vital for economic growth and development in an economy, but it's often associated with rising inequality. Whereas, the philosophy of inclusive growth as per Sustainable Development Goals (SDGs) suggest that poverty must end by 2030, which requires high growth rates and growth that is inclusive and shared across society. In this context, this study investigates how inclusive is a structural change in the selected developing economies of Asia like China, India, Indonesia, and Thailand. The findings suggest that the effect of Structural change on income inequality is inevitable. In the process of catching up with advanced economies, it has worsened the inequality in these economies, high-skilled workers have benefited from structural transformation. Hence, the mixed response was given by the population to these adjustments capacities. Therefore, nature, speed, and scale of structural change what matters for these countries to alleviate inequality and poverty. Investing in human capital (through educational reforms) by matching with skills, re-distributive policies and favorable macroeconomic policies can mitigate inequality. Growth can be inclusive if the structural transformation of the economy is conducive to productive employment generation, utilizing the unemployed and underemployed labor force engaged in activities of low productivity, which lacks in all the selected countries