Labor Demand in the 21st Century: A Systematic Literature Review and Research Agenda

english

Abstract

This article presents a systematic literature review of research on labor demand published between 2000 and 2025. Drawing on 38 peer-reviewed journal articles, the review synthesizes key theoretical developments, empirical approaches, and contextual applications in the field. It reveals that while neoclassical models and elasticity frameworks remain dominant, more recent studies have begun to integrate technological change, skill-biased dynamics, and institutional factors into labor demand analysis. Despite these advancements, the review identifies several critical gaps, including geographical concentration in high-income countries, underrepresentation of sectoral and skill-level heterogeneity, limited use of advanced econometric and data analytics techniques, and insufficient attention to labor market institutions in empirical models. These gaps hinder the development of comprehensive labor demand frameworks applicable to diverse economic contexts, particularly in emerging economies. The article concludes by outlining a future research agenda that emphasizes methodological innovation, expanded geographical scope, and policy relevance to enhance the understanding of labor demand in a rapidly evolving global economy.