Factor Intensities in Manufacturing Industries in Pakistan

The choice of technology in the developing countries has been a subject matter of considerable theoretical and empirical investigation. That labourabundant economy like Pakistan should opt for labour-intensive technology in order to maximise income and employment has been widely recommended. There has, however, been long-standing controversy as to whether, and how far, the choice of labour-intensive technology slows down the rate of growth of income as against the maximisation of current income by increasing the share of wages in income which are assumed to be wholly or mostly consumed and by correspondingly reducing the share of profits which are assumed to add mainly to the investible surplus and thus to increase the rate of capital accumulation.