Agriculture and Employment Growth In Guatemala

This paper provides an analytical framework and comparative data for four low and middle-income countries to quantify the means by which rapid agricultural growth accounts for the bulk of employment increase. It is assumed that the market-oriented path for individuals out of poverty is through increased demand for labor and consequent increased employment and rising wages.

Throughout the analysis agriculture is seen as producing tradable commodities. Exportable handicraft and remittances are also seen as tradable. The rest of the rural sector is seen as small-scale, non-tradable, and employment intensive, with demand derived entirely from expenditure and its multipliers from the rural tradable sectors. The urban sector is seen as similarly divided into tradable and non-tradable, with the latter depending entirely on the labor income of the tradable sector for demand.


John W. Mellor