Description

Abstract: The main Objectives of this study is to examine one aspect of social exclusion, the geographic isolation of individuals living in El Salvador’s rural areas and its impact on three labor market outcomes: labor force participation decision, sector of employment, and labor income. In this study, it is hypothesized that living in geographic isolation has a negative impact on rural workers’ labor outcomes, that geographic isolation, through a combination of security hazards, increasing transaction and working costs, depresses individual’s labor force participation rates, increases the likelihood of working in low-productive jobs, and results in lower labor income levels. The main results of this study indicate that the degree of geographic isolation does not discourage men from working; on the contrary, men living farther away from urban and maquila jobs are more likely to work. The degree of geographic isolation determines individuals’ sector allocation and their labor income as well. Women living farther away from urban areas or with less access to paved roads are highly concentrated in own-production agricultural activities, where women’s skills are rewarded less than comparable men’s skills. Own production in agriculture is a sector where women’s human capital accumulation does not influence their income labor level, though it does reward men’s skills. Through concentration into this sector, women living in geographic isolation obtain worse labor outcomes than men. Living in geographic isolation decreases women’s labor income. When working in own-account nonagricultural production, geographic isolation also has a negative impact on men’s labor income.