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Population, Labour Force, and Economic Growth

Published online by Cambridge University Press:  11 November 2008

James Pickett
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Extract

No question is currently more topical in development studies than that of employment. This strong concern, which has been linked to income distribution and continuing poverty, as well as more-or-less open unemployment1, is relatively recent in origin. It has generated a number of missions to developing countries by the I.L.O., seen the design (by the same international organisation) of a world employment programme, and given rise to much academic writing. One mildly puzzling feature is that many policies have been prescribed on very limited data.

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Articles
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The Journal of Modern African Studies , Volume 11 , Issue 4 , December 1973 , pp. 591 - 609
Copyright
Copyright © Cambridge University Press 1973

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References

Page 591 note 1 See, for example, Seers, Dudley, ‘What Are we Trying to Measure?’, in Journal of Development Studies (London), VIII, 3, 04 1972, pp. 21–36.Google Scholar

Page 591 note 2 Turnham, David, The Employment Problem in Less-Developed Countries (Paris, O.E.C.D., 1971), p. 15.Google Scholar

Page 592 note 1 Sources: U.N. Demographic Handbook for Africa (New York), 06 1971Google Scholar and U.N Economic Commission for Africa secretariat, Addis Ababa.

Page 593 note 1 Kuznets, Simon, Modern Economic Growth (New Haven, 1966), p. 34.Google Scholar

Page 593 note 2 It should be recognised that population statistics are less than perfect, that comparability is difficult, and that the concept of a ‘labour force’ is of doubtful (or at least limited) applicability to African conditions. Such recognition does not, however, seriously affect the present argument.

Page 593 note 3 The actual significance depends on how any particular movement is viewed. In a country with 5 million people and an urban–rural breakdown of 20: 80, a rural exodus of 0.5 per cent would increase the urban population by 2 per cent, and this might seem relatively small. In absolute terms, however, it would mean an addition of 27,000, which could conceivably mean that the increase in the urban labour force was twice as great as it would otherwise have been.

Page 594 note 1 Sources: Carr-Saunders, A. M., World Population: past growth and present trends (London, 1964)Google Scholar; The Encyclopedia Britannica (Chicago, 1956)Google Scholar; Urquhart, M. C. and Buckley, K. A. H. (eds.), Historical Statistics of Canada (Cambridge, 1965)Google Scholar; and United Nations, Demographic Yearbook, 1971 (New York, 1972).Google Scholar

Page 594 note 2 As specified by Rostow, W. W., Stages of Economic Growth (Cambridge, 1960).Google Scholar The present usage is not an endorsement of his views on historical development, but simply a convenient method of imposing some uniformity.

Page 595 note 1 United Nations, Survey of Economic Conditions in Africa, 1967 (New York, 1968), p. 6.Google Scholar

Page 595 note 2 The data which follows on the age composition of the population in 1960, crude birth and death rates, fertility rates, and age-specific death rates are derived from the U.N.E.C.A. Demographic Handbook for Africa (Addis Ababa, 1969).Google Scholar

Page 596 note 1 Source: ibid.

Page 596 note 2 Source: Table 3.

Page 597 note 1 It will also be more intense if in any period there is an initial pool of unemployment. A realistic consideration of African circumstances would require an estimate of existing unemployment, which I have not attempted. In this article it is convenient simply to Connate technology as the capital labour ratio. Credit should be given to Hans Singer for recognising early that the intensity of the population problem in Africa would be related to the rigidity of technology. See his International Development: growth and change (New York, 1964), ch. 16.Google Scholar

Page 598 note 1 For an incisive discussion of the relevance of macro-economic policy to employment, see Lewis, W. Arthur, ‘The Causes of Unemployment in Less Developed Countries and Some Research Topics’, in International Labour Review (Geneva), c, 3, 05 1970.Google Scholar

Page 598 note 2 For the formal elaboration of a relevant hypothesis, see Eckaus, R. S., ‘The Factor- Proportions Problem in Underdeveloped Areas’, in The American Economic Review (Providence, R.I.), XLV, 4. 09 1955, pp. 539–65.Google Scholar

Page 599 note 1 Thus Lauchin Currie suggests a strategy for Columbia that calls for the net annual addition to the labour force plus some transfer of subsistence labour to be added to the urban force; see his Accelerating Development (New York, 1966), ch. 8.Google Scholar

Page 599 note 2 See, for example, Frank, Charles Jr, ‘Urban Unemployment and Economic Growth in Africa’, in Oxford Economic Papers (Oxford), XX, 2, 07 1968, pp. 250–74.Google Scholar

Page 599 note 3 For a useful justification of an ‘intermediate strategy’ for Columbia, see the I.L.O.'s report, Towards Full Employment (Geneva, 1970), ch. 4.Google Scholar It is worth noting that, in seeking 5 million additional jobs between 1970 and 1985, the inter-agency team proposed to find only 800,000 openings in agriculture.

Page 599 note 4 Agricultural Development in Modern Japan (Rome, 1966), F.A.O. Agricultural Planning Series, No. 6.Google Scholar

Page 599 note 5 Higgins, Benjamin, Economic Development (London, 1969), p. 619.Google Scholar

Page 600 note 1 Relevant data are again weak and limited. The lower rate of 7·3 per cent can nevertheless usefully be compared with the following average annual percentage increases in nonagricultural employment: Cameroun, 0·2; Gabon, 5·8; Ghana, 2·1; Kenya, – 2·3; Nigeria, 2·1; Tanzania, 5·9; Uganda, 0·8; and Zambia, 7·3. These figures are from the I.L.O. Yearbook of Labour Statistics (Geneva, 1969),Google Scholar and except for Zambia (1963–1968) they all refer to the period 1960–8.

Page 601 note 1 It is worth recording that the problems discussed in this section, indeed in this article, call for a general rather than a partial equilibrium analysis. Thus, for example, industrial development will at once reflect and react upon income distribution (and hence, possibly, the savings rate), the pattern of demand, and the feasibility of agricultural progress. When, however, everything depends upon everything else, exhaustive discussion is constrained by complexity and lack of data.

Page 601 note 2 Chenery, H. B., ‘The Role of Industrialization in Development Programs’, in The American Economic Review, XLV, 2, 05 1955, p. 40.Google Scholar

Page 602 note 1 The non-agricultural sector is taken to comprise manufacturing, construction, and a residual which includes mining, services, and transport. For convenience, a rigid but not wholly realistic distinction may be made between the urban/modern/industrial sector, and the rural/traditional/agrarian sector.

Page 602 note 2 At somewhat higher income levels than those found in Africa – e.g. in the move from $200 to $400 per head – it has been suggested that construction might be expected to grow 50 per cent more quickly than G.D.P. See Strassman, P., ‘Construction Productivity and Employment in Developing Countries’, in International Labour Review, CI, 5, 12 1970.Google Scholar

Page 603 note 1 The initial weights are impressionistically based upon sectoral contributions to G.D.P. in 1966 as shown in the U.N. Survey of Economic Conditions in Africa, 1967, ch. 1.

Page 603 note 2 Angus Maddison has, in effect, calculated that ‘productivity’ in non-agricultural activities as a whole increased for 19 developing countries, on the average, at an annual rate of 2.1 per cent between 1950–64. See his Economic Progress and Policy in Developing Countries (London, 1970), p. 42.Google Scholar An annual increase of 09 per cent is obviously a very modest allowance for 20 years of technical progress, plus the fact that productivity in manufacturing undoubtedly increases more rapidly than in non-agricultural activities as a whole.

Page 603 note 3 For some measure of the mainly positive changes in productivity during the 1960s in the Philippines, see Bhalla, A. S., ‘The Role of Services in Employment Expansion’, in International Labour Review, CI, 5, 12 1970.Google Scholar

Page 604 note 1 The distribution of employment in each sector in 1970 is impressionistically based on relevant data provided by Frank, op. cit. table IV.

Page 604 note 2 See the abstract of Yves Sabolo, ‘Sectoral Growth of Employment’, ibid. which suggests, on the basis of a study of 28 developing countries, that employment in manufacturing can be expected to grow at a rate of 20 per cent lower than that in construction.

Page 605 note 1 Towards Full Employment, p. 571.

Page 606 note 1 Frank, loc. cit. p. 266. Cf. also Harris, J. R. and Todaro, M. P., ‘Wages, Industrial Employment and Labour Productivity in a Developing Economy: the Kenyan experience’, in Eastern African Economic Review (Nairobi), I, 1, 06 1969, pp. 29–46.Google Scholar

Page 606 note 2 It should be noted that the problem of proportion can be exaggerated. Thus Frank seems to discount a doubling of labour intensity in manufacturing, because this raises employment growth by a mere 0·4 to 0·6 per cent. An increase of o6 in Table 8 would increase employment in manufacturing in 1985 by 18,000 and reduce the level of unemployment by 16 per cent.

Page 608 note 1 See Bruton, H.J., Principles of Development Economics (Englewood Cliffs, N.J., 1965, ch. 17Google Scholar; and Eckhaus, R. S., ‘Technological Change in Less Developed Areas’, in Asher, R. E. (ed.), Development of the Emerging Countries (Washington, 1963).Google Scholar

Page 608 note 2 See Pack, H. and Todaro, M. P., ‘Technological Transfer, Labour Absorption and Economic Development’, in Oxford Economic Papers, XXI, 3, 11 1969Google Scholar; and Todaro, M. P., ‘Some Thoughts on the Transfer of Technology’, in Eastern African Economic Review, II, 1, 06 1970, pp. 53–64.Google Scholar

Page 608 note 3 See Harris and Todaro, loc. cit.

Page 608 note 4 For a review of the evidence, see Elkan, Walter, ‘Urban Unemployment in East Africa’. in International Affairs (London), XLVI, 3, 07 1970, pp. 517–28.Google Scholar

Page 609 note 1 See Turner, H. A. and Jackson, Dudley, ‘On the Determination of the General Wage Level’, in The Economic Journal (London), LXXX, 4, 12 1970, pp. 827–49.Google Scholar