Thoughts on employment typologies

Abstract

Mineral (and some other natural resource) exports tend to create very few jobs. This, together with the disincentive they create for the production of other tradables, can leave the country with a difficult employment/income distribution challenge. The export sector creates a few highly productive jobs, which tend also to be highly paid through a process of rent-sharing, but the country's labour demand curve may be very steep (price-inelastic) so that the equilibrium wage may be very low. Such a situation calls for policy-makers to think seriously about employment policy, and to foster labour demand in some combination of tradables and non-tradables, whose optimal mix depends on the specific situation of the country.