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How Third World States Can Raise Employment Even Under Globalization: Service Employment in Brazil 1991-2000

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Abstract:

This paper considers the types of governments that less developed nations can use to raise employment even in fiscal crisis. One effective option is adult vocational education which is both cheap and supported by significant transnational governments. In principle, such programs should fail because high labor surpluses and low reservation wages facilitate employer on the job training, reducing the impact of government training in raising human capital stocks per se. The surprise twist is that graduates of adult vocational training who are self employed market their way into economic success by increasing aggregate demand for their sector. This unexpected finding is illustrated with econometric data on service sector employment in Brazil. The key lesson is that more attention needs to be paid to programs that increase self employment and less to human capital per se.

Most Common Document Word Stems:

employ (50), educ (43), train (39), vocat (39), increas (35), incom (31), state (28), market (24), worker (24), effect (23), capit (20), aggreg (20), labor (19), demand (18), servic (18), world (18), rais (18), econom (16), industri (16), sector (16), product (16),

Author's Keywords:

economic development, globalization, labor markets, Brazil, state, education
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Name: American Sociological Association
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Cohn, Samuel. "How Third World States Can Raise Employment Even Under Globalization: Service Employment in Brazil 1991-2000" Paper presented at the annual meeting of the American Sociological Association, Montreal Convention Center, Montreal, Quebec, Canada, Aug 11, 2006 Online <PDF>. 2008-08-16 <http://www.allacademic.com/meta/p104088_index.html>

APA Citation:

Cohn, S. (2006, Aug) "How Third World States Can Raise Employment Even Under Globalization: Service Employment in Brazil 1991-2000" Paper presented at the annual meeting of the American Sociological Association, Montreal Convention Center, Montreal, Quebec, Canada Online <PDF> Retrieved 2008-08-16 from http://www.allacademic.com/meta/p104088_index.html

Publication Type: Conference Paper/Unpublished Manuscript
Abstract: This paper considers the types of governments that less developed nations can use to raise employment even in fiscal crisis. One effective option is adult vocational education which is both cheap and supported by significant transnational governments. In principle, such programs should fail because high labor surpluses and low reservation wages facilitate employer on the job training, reducing the impact of government training in raising human capital stocks per se. The surprise twist is that graduates of adult vocational training who are self employed market their way into economic success by increasing aggregate demand for their sector. This unexpected finding is illustrated with econometric data on service sector employment in Brazil. The key lesson is that more attention needs to be paid to programs that increase self employment and less to human capital per se.

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Document Type: PDF
Page count: 19
Word count: 519
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1 How Third World States Can Raise Employment Even Under Conditions of  Globalization: The Successes and Failures of Job Training in Brazil Samuel Cohn Department of Sociology Texas A & M University Paper Prepared for the American Sociological Association Meetings of 2006 January 2006 The author would like to thank the National Science Foundation  the Council  for the International Exchange of Scholars and Texas A & M University for  their financial support. The author would also like to thank SENAC for their  generous provision of the training data for this project and Jocelyn Cao and  Abby Turner for their assistance creating the dataset. 1      The present paper uses as a springboard the question posed by Peter Evans – to  what extent do interventions in markets by third world states raise accumulation  above market levels? There is no question among sociologists that forms of state  intervention exist that promote economic development; the superior performance of  the state­driven East Asian economies provides evidence for state capacities to invest  and manage industries for long term strategic growth.      However  the repertoire of interventions available to governments of poor nations  has changed profoundly with the onset of the third world debt crisis. The stringencies  of IMF repayment plans have led to draconian limits on the budgets of poorer nations.  State centered strategies of economic growth while not being wholly eliminated have  been dramatically curtailed by debt­based fiscal crises. Even where states have some  funds available for economic development purposes  their capacity to use these funds  may be restrained by these transnational forces who punish excessively statist  actions with the withholding of vital international financial resources.      This has led some state commentators to argue that the state has effectively  become neutralized as an instrument of economic development policy. Such a  position is extreme; however if it were to be so  the role of sociologists in advising  third world governments would be significantly reduced. The loss of the state as a  lever for influencing capital accumulation would remove one of the fundamental  pillars of traditional sociological analyses of economic development. Like the third  world state  economic sociology itself would be facing a reduced field of action with  limited capacity for altering the effects of market forces.      Fortunately  neither economic sociology nor the state are completely dead. This  paper discusses one particularly common and widespread form of third world state  2 action that has received relatively little scholarly attention but which can play a  significant role in raising employment and income in the third world. The strategy is  mundane  pedestrian and not glamorous. As such it does not attract the attention of  macrosociologists looking at questions of big industry  leading edge sectors or  innovations in transnational structures. However  being routine or being obvious is  not the same as being ineffective – and third world governments need all the effective  strategies they can find. Furthermore  this strategy is non­controversial. It is largely  acceptable to international capital and consistent with the preferences of neoliberals.  As such  it has the capacity of receiving the support of the international financial  community without triggering adverse international consequences. The strategy has  the additional advantage of being cheap. In a time of persistent fiscal crisis  the most  robust economic development strategies are going to be those that place the fewest  financial strictures on third world budgets. State intervention in the economy now has  to be inexpensive if it is to be enduring or effective.      This strategy is adult vocational education. Vocational education is not a panacea.  The state provision of job training can only raise employment and income under a  limited number of stringent conditions; if those conditions do not apply  vocational  education will neither raise employment  nor reduce poverty. However  assuming  favorable conditions  job training for adults has a wide variety of advantages. It  requires very little capital so it is therefore cheap. The neoliberal economic  development community generally favors increasing productivity  education and  human capital. As such
+ + + VOCATIONAL ED .018 .003 VOCATIONAL ED .291 .255 VOCATIONAL ED .230 .160 .065 .068 .092 .097 .044 .047 n.s. n.s. .002 .009 .0001 .0007 R Squared .26 .26 .26 R Squared .57 .57 .57 R Squared .72 .73 .72 N 1114 1114 1114 N 1114 1114 1114 N 1114 1114 1114 17


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