A Model of Labor Markets and
The previous chapter described patterns of change of population and labor force during industrialization. What is required at this point, however, is a conceptual framework that helps provide an understanding of the possible behavioral influences that underlie these aggregate patterns of change. Thus, this chapter describes a conceptual framework that attempts to identify, in a useful way, existing labor markets in Puerto Rico and their evolution over time. In addition, an attempt is made to integrate microeconomic behavioral considerations into the analysis to better explain aggregate patterns of change.
Modern economic growth is associated with the rise of manufacturing and the decline of subsistence agriculture. The growth of urban formal (modern) activities and the expansion of commercial agriculture are also traditionally emphasized. The contribution of informal (traditional) sectors is ignored, except to the extent that they provide the leading sector with needed inputs. Yet some of the recent discussions about the limits to industrial employment expansion, the need for an equitable distribution of income, and the problems associated with rapid urbanization and migration suggest that greater attention should be given to identifying the less visible sectors of the economy and their potential for contributing to the development effort.
The framework is multisectoral and centers on the notion of economic dualism. More specifically, the intent is to capture dualism of a regional and technological nature. Dualism is represented by differences between sectors that tend to persist and widen over time, creating sharp contrasts. 1 These differences are apparent in the simultaneous emergence of dynamic growing enclaves