Regional development and the value of migratory labour - some perverse economic/technological interactions
Schramm, G.
Annals of Regional Science 22(Special Edition): 8-27
1988
ISSN/ISBN: 0570-1864 Document Number: 497165
The economic value of unemployed labour is less than its wage rate. Shadow-pricing of such labour is common practice in economic analysis. The usual outcome of such shadow-pricing is that the economic rate of return of a project is enhanced, but, this is not always the case. Using the data from a soil productivity enhancement project in Mexico, it is shown that the use of essential labour-saving technology in a project designed to increase agricultural output and farm income may reduce, rather than increase, economic benefits, if the displaced labour has no alternative employment opportunities, while the opposite is the case if such alternatives exist.