Employment implications of industrialization in developing countries : a survey

Abstract

The post-1966 literature on the employment implications of industrialization in LDCs is surveyed using observations based on three broad schools of thought regarding policies for increasing labor use. Emphasis is on three main questions: 1) to what extent does increasing employment conflict with increasing output in both the short and long run? 2) which goods should be produced at both the interindustry and intraindustry level (the output composition problem)? and 3) how should these goods be produced? It appears that the conflict between output and employment is more complex than has been supposed and that further theoretical and applied research is needed. Composition at the industry level is determined largely by the structure of aggregate demand and requires attention to domestic consumers, foreigners, the government, and private investors. After deciding these issues, the choice of technique is determined by such issues as econometric estimates, appropriate technology, small-scale industry factors, and capital utilization rates. The growth of the manufacturing industry alone cannot be expected to solve the employment problem in most LDCs. It can, however, be expected to perform better than it has in the past. Numerous references.

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