This study was conducted at the request of the World Bank and controlled for aggregation bias and individual level effects to study the overall labor market performance in Mongolia.

Mongolia has limited resources of labor. In the future, it is expected that it will become one of the hurdles in avoiding “Dutch disease” effects, since scarce labor resources might lead to increase in real wages. Moreover, latest data consistently show that the labor participation rate is falling.

Therefore, the aim of the study is to address the following issues.

• What are reasons for falling labor participation rate?
• What is the expected dynamics of the labor participation rate in the near future?
• What is the relationship between unemployment and labor participation rate in Mongolia?
• How significant is labor mismatch in Mongolia?
• Assessment of current policies, such as TVET programs, affecting the labor market.