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We develop a two sector growth model where consumption decisions are driven by non-homothetic preferences and a labor mobility cost. This cost is paid by the workers when they move to another sector and, therefore, it limits structural change. The two sectors are the agriculture and non-agriculture sectors. We show that this model can explain the following patterns of development: (i) balanced growth of the aggregate variables; (ii) the change in the sectoral employment shares; (iii) the changedoi:10.2139/ssrn.2618474 fatcat:g2btjfx55jclzfks7ql3v7cxbq