Biased Technological Progress and Labor Force Growth in a Dualistic Economy

Abstract

Asian development in the 1970's is likely to take place under conditions quite different from those typical of the past two decades. These changing conditions will have an important influence on the research focus relating to growth and development. This paper ex- amines two such changes. First, the population explosion of the 1940's and 1950's will be transformed into a labor force explosion in the current decade. While an extensive literature has developed on urban employment and labor absorption problems,' for the most part the work utilizes partial equilibrium analysis. A more pro- ductive approach to an analysis of the impact of the expected labor force explosion requires a general dynamic framework that specifies explicitly the derived labor demand functions in the industrial and nonindustrial sectors, the economy-wide labor supply function, and the process of intersectoral migration. The present paper develops such an analysis. Second, many Asian countries are now introduc- ing high-yielding, fertilizer-responsive seed varieties to an extent reminiscent of earlier Western episodes of Agrarian Revolution. Without exception these agricultural developments are of the labor- using, land-cum-capital-saving type....