Three Essays in Economic Growth and Development

The pattern of economic growth across Chinese provinces shows a close relationship between structural change and economic catch-up. In Chapter 1, I study this relationship in a multi-sector Eaton-Kortum model, and introduce a labor mobility friction across locations. I apply a novel accounting method to infer sectoral technologies and migration barriers among the provinces, using data on structural change from 1985 to 2009. The two main findings are: (1) relative to Beijing, the other provinces catch up substantially in agricultural and manufacturing technologies, but lag behind in service technology; and (2) the implied migration barriers are asymmetric, with people facing higher costs when migrating from poorer provinces into richer ones. The counterfactuals provide two additional findings: (3) eliminating the migration barrier asymmetry improves regional convergence by reducing labor misallocation across locations; and (4) inter-provincial trade based on comparative advantage improves regional convergence because the relatively rich provinces gain less from trade in an environment with structural change.;Old-age support is considered to be an important motivation for people to rear and raise children in China. If this is true, social security could play an important role in affecting people's fertility choices. In Chapter 2, I construct an endogenous fertility choice model embodying such a motivation to investigate the role of social security. Theoretically, social security reduces fertility by mitigating this old-age support motivation. It induces people to invest more in their children instead of bearing more children. Quantitatively, the model explains the fertility variations across provinces, both in villages and in cities. More significantly, the social security tax by itself could explain at least 40% of the rural-urban fertility differences across provinces, on average.;Selection of firms with different productivities can affect total factor productivity (TFP) and aggregate output. Chapter 3 investigates the selection effect jointly generated by entry costs and overhead costs. Using an analytically tractable model with entry and exit, I show that entry costs and overhead costs have different effects in the selection of firms into production. Specifically, for the Pareto distribution, reducing entry cost increases average productivity, but reducing overhead cost decreases average productivity. Therefore, the positive effect of reducing overhead cost is weakened by its adverse effect on average productivity. Particularly, the output response is dampened for a high elasticity of substitution between differentiated products. I apply the model to infer these costs and to quantify their potential effects, using 6-digit (NAICS) U.S. manufacturing data. Empirical results show that a 1% reduction in entry cost increases output by 0.27%, while the same percentage of reduction in overhead cost increases output by just 0.048%.