Manpower, Labor Absorption, and Employment in Colombia

The unemployment problem in Colombia was recently discussed by Geithman and Landers (1973) in this journal. They argue that one of the fundamental causes of unemployment is a “higher capital-labor ratio” than would otherwise exist, according to factor endowments and the structure of final demand. This is attributed to the dependency of less developed countries (LDCs) on capital from advanced countries (ACs), with laborsaving characteristics suitable for the latter (Geithman and Landers, 1973: 317). Their excessive capital intensity thesis is based on Bruton's cross-sectional statistical study (1967), which made a number of simplified assumptions which should be examined in some detail. Since Bruton and Geithman and Landers use the production function in their analysis, it is necessary to briefly discuss its most important characteristics. The quantities of capital (K), labor (L), and other inputs required by the industrial sector or the entire economy to achieve various levels of output (Q), can be viewed as a generalized production function.