Occupational Preferences of Skilled Workers in the Presence of a Large Development Sector

Abstract

Aid and the resulting development sector have expanded in developing countries in the past decades. Many studies have explored the effects of aid, but few have studied the effects of the development sector on decisions around labor supply and occupational choice. Using primary data from Sierra Leone, this article contributes to the literature by exploring how the presence of a large development sector influences the occupational preferences of skilled workers. Four key findings emerge. First, the development sector is an attractive employment choice as the largest share of skilled jobseekers (44 percent) opt for early-career employment working for a donor organization, international NGO or local NGO. Second, there is an ability-effect as workers with higher cognitive ability are more likely to choose the development sector over the public and private sectors. Third, more prosocial jobseekers and those seeking social status from employment are more likely to prefer the development sector. And fourth, favorable perceptions of the development sector reduce the probability of choosing the public and private sectors. These findings speak to policy and should encourage development organizations to reflect on their impact on the dynamics of the labor market in countries in which they operate.