Unskilled Labor for Development. Its Economic Cost

Unskilled labor is one of the most abundant resources available in developing countries and one that is drawn on heavily to further their economic growth. The cost of this labor is therefore an important factor in the choice and design of development projects. But how can this cost be determined? If the labor market is working efficiently, and particularly if labor is fairly mobile and fully employed, the market wage can be used. When these conditions are lacking and a surplus of unskilled labor persists apart from seasonal fluctuations, the economic or shadow wage must be estimated using other criteria. This book attempts to minimize reservations regarding the accuracy of such economic pricing. In the past, the methods for assigning economic values to labor, particulary unskilled agricultural labor, have been somewhat crude and relevant only in limited geographical areas. The task is made more difficult because most of the empirical data used in the calculations are available only at the national level. A macro approach to economic pricing is therefore formulated in this book and applied to Taiwan and the Philippines. The numerical results confirm expectations, based on general labor market conditions in the two countries, and additional studies of Korea and Indonesia are included for comparison

Agriculture · Developing country · Economic growth · Economics · Labor cost · Labour economics · Shadow (psychology) · Wage · Economic Growth and Productivity · Economic Theory and Policy

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