Labor Mobility and Economic Growth: The Central American Experience. Costa Rica and El Salvador

Abstract

Purpose and Scope There is strength in numbers. This may be a reasonable judgment to make about your own or your adversary's position on the battlefield or the chessboard, but in the realm of economic development to follow it quite literally-especially as it relates to the effects of population growth-can lead to serious blunders.' Advanced nations-those with high rates of economic growth as well as high per capita incomes-generally feed on population growth as a means of stimulating further growth. Less advanced countries-those with low or negative rates of growth as well as low per capita incomefind high population growth a serious deterrent to economic development.2 Generally, in this latter group, development or the ability to develop seem closely related to raising productivity levels. Saddled with large segments of the working force in agriculture-contributing little in relationship to their size to growth in total product-the pattern becomes the monkey on the planner's back. Often the planner is caught between giving the country's population a choice between continued rural underemployment or unemployment in some hovel on the fringe of some urban center. However unseemly the latter may sound, a few hours of portering for wages may be less tiring and more productive than hoeing a leeched plot for youths in many less developed countries. Underemployment can be reduced in a variety of ways: limiting population growth, increasing agricultural output levels, and reducing the agricultural working force by increasing job opportunities in nonagriculture. This paper will seek to explore the last alternative by estimating the rate of growth required in nonagriculture to induce movement out of agriculture to stabilize agricultural working-force growth. Specifically, what rate of growth should there be in nonagricultural industries so that the volume of new entries-youths between the ages of 15 and 24-into agriculture be no greater than the volume of deaths and retirements in agriculture? The relation between in-movement into nonagricultural