Abstract
This paper introduces a theory-based approach for exploring the predominant driver of structural change in the early and late stages of development. The results reveal that labor pull is a common driver in the early stages of development. The drivers in the late stages of development are more diverse, with labor pull remaining as the predominant driver in Asia but reallocation cost reduction becoming the main driver in most OECD and Latin American countries. Finally, there are few labor push driven structural changes after World War II