Abstract
AbstractWe employ a detailed skill database from Brazil to investigate how skill relatedness influences structural change in a developing country. We find a positive relationship between the skill‐relatedness density and the entry of skill‐related industries; a negative association with the exit of industries from regional economies; and a positive influence on employment growth. The relationship between skill relatedness and structural change varies across different regions. Entry is more likely in large regions, and depends less on relatedness in advanced and middle‐income regions. Skill relatedness plays a role in preventing exit from small regions and enhancing employment growth in larger regions.
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