Using a sample of 106 growth spells covering 39 countries, we find that the sectoral growth pattern and the employment/productivity profile vary significantly among countries. In the aggregate, the employment intensity of growth does not seem to matter for poverty any more than the productivity intensity. But the sectoral pattern of employment generation and productivity growth is important. The results appear to suggest that employment-intensive growth in the secondary sector alleviates poverty. By contrast, more employment-intensive growth in agriculture tends to be correlated with increases in poverty while productivity-intensive growth in agriculture has a significant correlation with poverty reduction, although both measures are highly correlated so that it is difficult to asses whether productivity increases in agriculture are different from “moving workers out of agriculture.” Evidence for the link between employment-intensive growth and education, regulation, the investment climate and trade is less conclusive, as the available samples are rather small. There seems to be no clear correlation between schooling and employmentintensive growth in manufacturing or the secondary sector as a whole. As far as regulation is concerned, only minimum wages (negatively) and severance pay (positively) appear to be correlated with employment-intensive growth in manufacturing. Unionization does not seem to affect employment-intensive growth in the secondary sector or in manufacturing. However, education does seem to be positively correlated with agricultural productivity-intensive growth. Volumes of trade, favorable terms of trade and an undervalued currency promote employment-intensive growth in manufacturing, while a landlocked situation reduces it. Trade has differing impacts on the primary and secondary sectors, and thus policy on this front might entail important tradeoffs.

The framework used in this paper is inscribed in the segmented labor markets tradition. Although we do not provide a formal model of segmentation that explains the mechanisms at work, we provide an intuitive description of the implications of labor market segmentation for the poverty/growth linkages. The results appear to support the hypothesis of labor market segmentation with good and bad sectors coexisting and movements from the latter to the former increasing welfare and reducing poverty. Through our assessment of sectors according to economic classification, our results suggest that agriculture may be a bad jobs sector, which is consistent with traditional dual economy models. However, results also point to heterogeneity between regions as to which sectors can be equated to the ‘low earnings sectors’, with non LAC countries apparently having an important share of bad jobs in the service sector.

The results imply that focusing on the overall employment elasticity of growth may not be an effective way to increase the poverty impact of growth. Therefore, it is important for policymakers to move beyond the aggregate figure of growth and its impact on employment and to place greater focus on the sectoral distribution of growth and its employment and productivity profile. Higher employment will reduce poverty only if it is concentrated in the good jobs sectors. On average, this appears to be the secondary sector (manufacturing, construction, mining and utilities). Focusing on the rising productivity of agriculture and moving workers out of the agricultural sector will also 33