The role of sectoral growth patterns in labor market development
Francisco Javier Arias-Vazquez ,
Jean Lee () and
David Newhouse
No 6250, Policy Research Working Paper Series from The World Bank
Abstract:
This 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.
Keywords: Labor Policies; Labor Markets; Economic Theory&Research; Achieving Shared Growth; Banks&Banking Reform (search for similar items in EconPapers)
Date: 2012-10-01
New Economics Papers: this item is included in nep-lab, nep-lam and nep-sea
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Citations: View citations in EconPapers (8)
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Working Paper: The Role of Sectoral Growth Patterns in Labor Market Development (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:6250
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