Growing Like India: The Unequal Effects of Service-Led Growth

 Who ultimately benefits from growth in services? How do we measure productivity growth in non-tradable sectors like retail, restaurants, or residential real estate? EGC affiliate Fabrizio Zilibotti of Yale Economics aimed to answer questions like these with a recent presentation that highlighted his joint research with Tianyu Fan and Michael Peters of Yale.

Read the Publication

Fan, Tianyu; Peters, Michael; Zillibotti, Fabrizio. "Growing Like India. The Unequal Effects of Service-Led Growth (2023). Discussion Papers. 1097.

Zilibotti’s presentation focused on a new model he developed with Fan and Peters, which analyzes household income data to assess how the welfare gains from services-led growth are distributed by income level. Fan, Peters, and Zilibotti measured changes in Indian living standards from 1987 to 2011, a period when India’s services sector underwent rapid productivity growth. They found that this growth did contribute to aggregate welfare gains, but that high-income households in urban areas received more benefits than lower-income households. This research is forthcoming in Econometrica.

EGROW is a research-oriented think tank ​​that conducts policy-related work in India and across South Asia, with a focus on understanding the macroeconomic factors behind economic growth and its effects on public welfare.