Rural poverty and uneven economic development remain persistent challenges in palm-oil-producing regions. Employment in the palm oil sector has been proposed as a potential pathway for improving livelihoods, enhancing income distribution, and driving structural economic transformation. This study systematically reviews peer-reviewed literature to synthesize contemporary evidence on how palm oil employment shapes rural socioeconomic outcomes. The primary objective is to determine the impacts of palm oil labor on livelihood improvement, income inequality, and broader structural changes in rural economies. The study employs a qualitative Systematic Literature Review (SLR) methodology. Data were collected from 39 open-access, English-language, peer-reviewed articles indexed in Scopus, published between 2019 and 2025. Articles were selected based on their relevance to palm oil employment, poverty alleviation, rural livelihood, income, and rural development. Data extraction focused on employment patterns, household income, smallholder participation, gender dynamics, and structural transformation indicators. Analytical procedures involved thematic coding and synthesis across eight emergent themes, enabling the identification of consistent patterns and contextual variations across regions. Findings indicate that palm oil employment substantially contributes to rural labor absorption, income improvement, welfare enhancement, smallholder productivity, and structural economic transformation. Positive outcomes are amplified through inclusive smallholder programs, contract farming, and cooperative participation, while challenges persist regarding income inequality, gender wage gaps, land tenure insecurity, and environmental vulnerabilities. The evidence highlights the sector’s potential as a catalyst for multidimensional rural development when supported by equitable governance and sustainability measures. In conclusion, palm oil employment serves as a critical instrument for poverty reduction and rural economic modernization. Future research should explore longitudinal, cross-country analyses and examine policy interventions that strengthen inclusivity, sustainability, and resilience in palm-oil-dependent communities.