Publication: The Role of Sectoral Growth Patterns in Labor Market Development
Date
2012-10
ISSN
Published
2012-10
Author(s)
Arias-Vazquez, Francisco Javier
Lee, Jean N.
Newhouse, David
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.
Citation
“Arias-Vazquez, Francisco Javier; Lee, Jean N.; Newhouse, David. 2012. The Role of Sectoral Growth Patterns in Labor Market Development. Policy Research Working Paper; No. 6250. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/82260543-0e13-5627-8474-73ae3de834f0 License: CC BY 3.0 IGO.”
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