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Is Local Social Development Associated with Workforce Composition? A Municipal Analysis of Mexico, 1990-2015
1Department of Sociology University of North Carolina at Chapel Hill.
Population Research and Policy Review
|May 21, 2019
Summary
Local development reduces subsistence farming and boosts formal employment and entrepreneurship. Gains are greatest in communities with mid-to-high social development levels, shifting labor from agriculture to formal sectors.
Area of Science:
- Socioeconomics
- Development Studies
- Labor Economics
Background:
- Subsistence farming and informal employment are prevalent in low-to-middle-income countries.
- Regional disparities in development within countries impact labor market patterns.
- Local-level social development's effect on workforce composition is understudied.
Purpose of the Study:
- To investigate the relationship between local social development and municipal workforce composition in Mexico.
- To analyze how multi-dimensional social development influences agricultural and non-agricultural labor, including formal and informal sectors.
- To identify the development thresholds associated with shifts in employment and entrepreneurship.
Main Methods:
- Utilized pooled cross-section data from the Mexican Census (1990-2015).
- Employed fixed effects regression models to analyze municipal workforce changes.
- Measured social development using education, housing, utilities, and poverty indicators.
Main Results:
- Local development significantly decreased agricultural own-account work.
- Non-agricultural wage labor and employer self-employment increased with development.
- Informal sector initially grew in less developed areas, while formal sector and selective entrepreneurship increased in more developed areas.
Conclusions:
- Community-level social development can reduce subsistence work and foster formal employment and entrepreneurship.
- Investments in social development are most effective in communities with existing mid-to-high development levels.
- Targeted development strategies are crucial for maximizing labor market transitions.
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