This chapter compiles comprehensive labor data for Bhutan from 1990 to 2022, addressing the absence of consistent time-series estimates for the compensation of employees (COE) in the Bhutanese System of National Accounts. By constructing quality-adjusted labor input (QALI) across industries, the study identifies significant shifts in labor dynamics, particularly following democratization. Bhutan’s labor share remained consistently lower than India’s, experiencing a decline until the late 2000s, followed by an upward trend after the transition. From 2008 to 2022, aggregate hours worked grew modestly (0.14% annually), while labor input expanded by 3.13% annually, largely driven by a 2.99% annual improvement in labor quality. This improvement was primarily due to educational attainment, which accounted for 84.3% of the total gain. The chapter also emphasizes the limited role of the hydropower sector in direct employment despite its economic significance. Although data accuracy varies, this chapter provides a critical foundation for understanding Bhutan’s labor market dynamics and highlights challenges related to labor mismatches and the broader implications for sustainable development.