The role of sectoral growth patterns in labor market development
AbstractThis paper investigates the relationship between sectoral growth patterns and employment outcomes. A broad cross-country analysis reveals that in middle-income countries, employment responds more to growth in less productive and more labor-intensive sectors. Employment in middle-income countries is susceptible to a resource curse, and grows rapidly in response to manufacturing and export manufacturing growth. Within Brazil, Indonesia, and Mexico, the effects of different sectoral growth patterns are context dependent, but differences in sectoral growth effects on employment and wages are substantially reduced in states or provinces with higher measured labor mobility. Consistent with this, aggregate employment and wage effects of growth by sector are close to uniform when examined over longer time horizons, after labor has an opportunity to adjust across sectors. The results reinforce the importance of growth in more labor-intensive sectors, and suggest that job mobility may be an important mechanism to diffuse the benefits of capital-intensive growth.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 6250.
Date of creation: 01 Oct 2012
Date of revision:
Labor Policies; Labor Markets; Economic Theory&Research; Achieving Shared Growth; Banks&Banking Reform;
Other versions of this item:
- Arias-Vazquez, Francisco Javier & Lee, Jean Nahrae & Newhouse, David, 2012. "The Role of Sectoral Growth Patterns in Labor Market Development," IZA Discussion Papers 6926, Institute for the Study of Labor (IZA).
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-03 (All new papers)
- NEP-LAB-2012-11-03 (Labour Economics)
- NEP-LAM-2012-11-03 (Central & South America)
- NEP-SEA-2012-11-03 (South East Asia)
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