Labour mobility and labour utilization in developing countries
Collier, P.
Oxford Bulletin of Economics and Statistics 37(3): 169-189
1975
ISSN/ISBN: 0305-9049 DOI: 10.1111/j.1468-0084.1975.mp37003001.xDocument Number: 642903
There have been two separate debates concerned with labour utilization. Chronologically the first was that of rural surplus labour. The notion was that a substantial proportion of agricultural labour could be withdrawn without reducing output and redeployed productively to generate capital formation. Recently, attention has shifted to the phenomena of rural-to-urban migration and urban unemployment, the former apparently exacerbating the latter. If the empirical assumptions of both these debates are correct then their conclusions concerning labour utilization are both false. If there is surplus labour in each sector then there cannot be any sectoral mis-allocation of labour. This paper is predicated upon the assumption that the rural surplus labour hypothesis is false. If the marginal product of labour in agriculture is positive then the efficient utilization of labour becomes a valid issue. A necessary condition for efficient labour utilization is that the marginal product of homogeneous labour should be equated within and between all sectors. The issue considered whether present patterns of labour mobility enable the achievement of this condition. This issue is a matter of some dispute. The paper briefly reviews current theories of labour allocation before setting out an alternative approach.