Education, Labor Markets, and Economic Growth: A Descriptive Analysis of Smaller Economies and Their Trade Superpowers

Abstract

Historically, developing countries like the Dominican Republic (DR) and the Democratic Republic of Congo (DRC) have maintained extensive trade relationships with global superpowers, but they continue to face persistent economic challenges. In this paper, I explore whether disparities in GDP between the DR and DRC, with respect to their superpower trade partners, affect the economic relationships and growth trajectories of these countries. I leverage longitudinal GDP data from 2000–2023, and compare the United States and China’s trade, labor market, and educational attainment variables against their trade counterparts, DR and DRC’s respective variables. My descriptive analysis revealed that high-income nations with universal secondary education translate trade into sustained wage increases and GDP growth. In contrast, developing exporters show rising exports but declining secondary-school completion, which in turn limits wage growth and constrains long-term economic potential. These findings suggest that trade alone does not create equitable economic growth in developing economies; rather, this paper points to the importance of investing in education and human capital.