Cambridge Histories Online © Cambridge University Press, 2008
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0521812909c14BCB929-Bulmer 052181290 9 October 6, 2005 14:6
616 Miguel Sz
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ekely and Andr
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es Montes
populations have completed primary and approximately 30 percent have
completed secondary. This immense disparity is reflected in almost every
generation forall Latin American countries, until the 1960 and 1970 cohorts.
The countries in Latin America most likely to achieve levels of education
on a par with the East Asian countries are Argentina and Uruguay. Still,
the sad fact remains that even when a few Latin American countries win
the struggle to achieve high levels of education, the bulk of their regional
neighbors are left behind.
physical capital
Specific measurement of physical capital accumulation is generally prob-
lematic. Even when information is available regarding physical capital, it is
rarely useful for comparisons over time. For that reason, and to allow for
a longer time horizon, we use a proxy for physical capital, namely, capital
per worker. This indicator portrays the total value of the physical capital
of an enterprise, including inventories and fixed equipment, per each unit
of labor employed.
Figure 14.8 presents the ratios of capital stock per worker for Latin
America, South Korea, and Thailand. As shown, the Latin American region
accounted for more than two times, even three in the case of Thailand, the
capital per worker in 1965.Despite this clear head start, South Korea over-
took the region in the following years. Growth continued steadily during
the 1970s until 1982, when Latin America’s capital per worker decreased
during the crisis of the 1980s, and South Korea’s capital accumulation
expanded. By the 1990s, South Korea’s capital per worker was almost two
times greater than Latin America’s, whereas the gap between Latin America
and Thailand narrowed considerably between 1965 and 1992.
These data are broken down by country for the Latin American region
in Table 14.8.Asisapparent, the capital per worker ratio grew substantially
between 1965 and 1975. The ratio doubled in countries such as Bolivia,
Mexico, Panama, and Paraguay, whereas the smallest, although still pos-
itive, growth rate took place in Peru and Venezuela. From 1975 to 1985,
however, although growth rates remained positive, they slowed drastically
throughout the region in comparison to the previous decade. This paved
the way for a sharp reduction in the capital-stock-per-worker ratio during
most of the 1980s and the beginning of the 1990s, when Chile was among
the only few to experience positive growth as the rest of the region headed
into a decline.