Abstract: In 1955, in an influential study Kuznets (1955) predicted an inverted-U relationship between development and inequality, mainly through structural transformation. Since then a large body of research has empirically tested the Kuznets hypothesis, but consensus is far less evident. In this paper, I argue that a heterogeneous process of structural transformation across the income distribution may explain such empirical irregularities. I specifically link the heterogeneity in growth incidence resulting from a shrinking agriculture sector across income quantiles to inequality measures. Empirical evidence drawn from the Ivoirian household survey data supports this theoretical prediction. However, the decomposition results indicate a relatively small contribution of structural transformation to total changes in inequality.