This paper builds a unified growth model of the development process featuring structural change, endogenous fertility and misallocation through firm-level distortions in order to explore the implications of bypassing manufacturing in today's developing countries. The model replicates several stylized facts including: (i) current GDP per capita is significantly related to a country's peak manufacturing employment share, (ii) fertility is higher (lower) in countries which have a larger (smaller) services share of non-farm labor, (iii) countries with lower peak manufacturing employment shares have lower levels of education. Through the lens of the model, 14% of current GDP per capita gaps are explained by countries having lower peak manufacturing employment shares, and cross-country income inequality is projected to increase over time.

This paper uses new data on copyright registration title pages from the Library of Congress (LOC) to analyze the intellectual and cultural development of the United States over 1790–1870. I construct national time series of book production over this period which show an uptake in per-capita terms in 1830, well before the start of the Second Industrial Revolution and the era of "knowledge based progress". Matching authors to locations (at the county level) using declassified census data reveals that the spatial distribution of intellectual production in the early 19th century is strongly correlated with inventive activity over 1860–1940 and the evolution of the manufacturing sector. Identification is based on a shift-share type instrument exploiting the large internal migration patterns occurring in this time period.

This paper studies how labor market power affects firm dynamics and aggregate productivity. We build a dynamic model of neoclassical monopsony with occupational choice, firm growth, and productivity-enhancing technology adoption. Labor market power lowers efficiency and leads to aggregate output losses by distorting the allocation of labor, entrepreneurship, and innovation decisions. The model is consistent with cross-country evidence of higher life-cycle firm growth and higher productivity investment in more competitive labor markets and can explain up to 42% of differences in income per capita across countries. We find that about one-third of the losses are attributable to a distorted selection of entrepreneurs and a lack of innovation, suggesting that efficiency losses may be greater than those estimated by previous studies.