The Role of Sectoral Growth Patterns in Labor Market Development

This paper investigates the relationship between sectoral growth patterns and employment outcomes both across and within countries. Consistent with the literature on sectoral growth patterns and poverty alleviation, a broad cross-country analysis reveals that in middle-income countries, employment r...

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Main Authors:	Arias-Vazquez, Francisco Javier, Lee, Jean N., Newhouse, David
Format:	Working Paper
Language:	en_US
Published:	World Bank, Washington, DC 2013
Subjects:	Economic growth Production structure Employment Unemployment Productivity
Online Access:	http://hdl.handle.net/10986/12145

id	okr-10986-12145
recordtype	oai_dc
spelling	okr-10986-121452021-04-23T14:02:59Z The Role of Sectoral Growth Patterns in Labor Market Development Arias-Vazquez, Francisco Javier Lee, Jean N. Newhouse, David Economic growth Production structure Employment Unemployment Productivity This paper investigates the relationship between sectoral growth patterns and employment outcomes both across and within countries. Consistent with the literature on sectoral growth patterns and poverty alleviation, 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. Sectoral growth patterns have surprisingly few discernible effects on the prevalence of wage or agricultural employment. In country case studies of Brazil, Indonesia, and Mexico, the effects of different sectoral growth patterns are context dependent. Within these countries, 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 manufacturing in generating employment in middle-income countries, although only manufacturing and natural resource growth show distinctive labor market effects, and those are largely limited to employment and unemployment. Finally, job mobility may be an important mechanism to diffuse the benefits of capital-intensive growth. 2013-01-18T20:10:09Z 2013-01-18T20:10:09Z 2012-10 http://hdl.handle.net/10986/12145 en_US Background Paper for the World Development Report 2013; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research Brazil Indonesia Mexico
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	Economic growth Production structure Employment Unemployment Productivity
spellingShingle	Economic growth Production structure Employment Unemployment Productivity Arias-Vazquez, Francisco Javier Lee, Jean N. Newhouse, David The Role of Sectoral Growth Patterns in Labor Market Development
geographic_facet	Brazil Indonesia Mexico
relation	Background Paper for the World Development Report 2013;
description	This paper investigates the relationship between sectoral growth patterns and employment outcomes both across and within countries. Consistent with the literature on sectoral growth patterns and poverty alleviation, 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. Sectoral growth patterns have surprisingly few discernible effects on the prevalence of wage or agricultural employment. In country case studies of Brazil, Indonesia, and Mexico, the effects of different sectoral growth patterns are context dependent. Within these countries, 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 manufacturing in generating employment in middle-income countries, although only manufacturing and natural resource growth show distinctive labor market effects, and those are largely limited to employment and unemployment. Finally, job mobility may be an important mechanism to diffuse the benefits of capital-intensive growth.
format	Publications & Research :: Working Paper
author	Arias-Vazquez, Francisco Javier Lee, Jean N. Newhouse, David
author_facet	Arias-Vazquez, Francisco Javier Lee, Jean N. Newhouse, David
author_sort	Arias-Vazquez, Francisco Javier
title	The Role of Sectoral Growth Patterns in Labor Market Development
title_short	The Role of Sectoral Growth Patterns in Labor Market Development
title_full	The Role of Sectoral Growth Patterns in Labor Market Development
title_fullStr	The Role of Sectoral Growth Patterns in Labor Market Development
title_full_unstemmed	The Role of Sectoral Growth Patterns in Labor Market Development
title_sort	role of sectoral growth patterns in labor market development
publisher	World Bank, Washington, DC
publishDate	2013
url	http://hdl.handle.net/10986/12145
_version_	1764419190298509312

The Role of Sectoral Growth Patterns in Labor Market Development

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