In this note we analyze the mechanisms through which the sectoral structure of employment affects the growth of regional income and the evolution of its distribution. In particular, we draw the distinction between a sectoral specialization effect, that influences growth through a price and a productivity channel, and a structural change effect that captures the impact of the reallocation of resources across sectors. To quantify the impact of these factors, and also to separate them from a “pure” regional effect, we use a simple convergence accounting framework that makes use of a shift-share decomposition of an indicator of relative regional income.

Key words: regional convergence, sectoral structure.
JEL Classification: O40, R11.