@article{Mueller_1989, title={Factor prices and rural unemployment in Brazil: a critical analysis of the neoclassic approaches}, volume={9}, url={https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/1610}, DOI={10.1590/0101-31571989-1385}, abstractNote={<p>It is widely known that in Brazil, agricultural! growth and modernization are<br />taking place together with a substantial “liberation” of the rural workforce. According to<br />evaluations based on the neoclassical doctrine, this is due to a severe distortion of relative<br />factor prices. Artificially cheap equipment and “expensive” labor have favored a large scale<br />substitution of the former for the latter. Thus, workers are being driven out of the farms at<br />a faster rate than that allowed by the creation of jobs in the rest of the economy. To correct<br />this situation, it would be necessary to eliminate the factor price distortions. The paper<br />argues that these evaluations are mistaken. They ignore the real nature of the process that<br />led to the adoption of mechanical technologies and to a growing “liberation” of manpower<br />from rural areas; the phenomenon is considerably more complex than what is implied in the<br />substitution of equipment for labor along an isoquant exhibiting substitutability. It argues,<br />furthermore, that the substitution of machinery for labor would not be reversed by the mere<br />adoption of a policy eliminating the “distortion” in factor prices.</p> <p><strong>JEL Classification:</strong> R23; Q12; J43.</p>}, number={2}, journal={Brazilian Journal of Political Economy}, author={Mueller, Charles C.}, year={1989}, month={Apr.}, pages={222-232} }