Employment in the Post WWII Latin American Development Literature

Joseph Ramos
Dev-out Working Paper Series


This paper traces and critiques the treatment of employment and the quality thereof in the post World War II literature on economic development, with particular reference to Latin America. It begins with Raul Prebisch’s clarion call for industrialization as the solution to the region’s abundance of labor, and relates it to W. Arthur Lewis and his thesis on development with unlimited supplies of labor. It then traces ECLAC’s subsequent doubts due to the surprisingly slow growth of industrial employment and the “premature” expansion of tertiary employment and eventual underemployment. Analysis and discussion in the region later turns to the labor market. On the one hand, ECLAC and structuralists draw attention to labor market segmentation (formal/informal) and underemployment, explained by them as a “structural heterogeneity” arising from differential rates of incorporation of modern technology. On the other hand, neo-liberals and more orthodox analysts focus on labor market rigidities to account for under and unemployment. The paper concludes with an assessment of where we stand and a brief look ahead.