DP2523 Industrial Employment, Investment Equipment and Economic Growth

Author(s): Harris Dellas
Publication Date: August 2000
Keyword(s): Economic Development, Equipment Investment, Industrial Employment, Labour Intensive Technology
JEL(s): O14, O30, O57
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=2523

The industrialization of labour is the main engine of growth during the early stages of economic development. In less developed countries, equipment investment has played a less important role than non-equipment investment; and it has only proved growth enhancing when it either encountered a substantial industrial labour force or fostered a large increase in the share of industrial employment. These findings draw attention to the effects of investment on the composition of the labour force; and unlike recent claims emphasizing industrialization via equipment investment, they suggest that employment industrialization policies may hold the key to success in the LDC world.