Study| FES NEW YORK ECONOMY AND FINANCE Growth and Structural Change Implications for Income Inequality in Developing Countries Haroon Bhorat, Zaakhir Asmal, and Caitlin Allen October 2020 Since the 1950s, it has been accepted that income ine­quality may increase in the early phases of economic development, when growth is achieved through move­ment away from agriculture and toward manufacturing. In the later phases of develop­ment this inequality gap is ex­pected to narrow as more workers enter industrialized sectors. However, recent stud­ies on developing countries do not support this expectation. This Study asks whether struc­tural transformation observed in developing countries dif­fers from this traditional transformation-and-growth path, and if so, what are the implications for inequality in developing countries?