Formal employment in León and Chinandega (2001-2018): an explanation of the production of the manufacturing industry and the financing of the agricultural sector

Abstract

Reyes (2013) proposes “The Theory of development " (1940-1950) which perceives underdevelopment as a phenomenon that affects all spheres within societies. The existence of regional cases identifies that industrialization transforms the productive structure and provides higher productivity employment. Therefore, this study explains formal employment in the west of the country by the balance of the agricultural loan portfolio and the added value of the manufacturing sector, an estimate made with official data from the Central Bank of Nicaragua (CBN). Chinandega and León participate in the generation of formal Nicaraguan employment (2018) as the second and third departments that contribute the most to this variable. Agriculture and manufacturing, compared to other economic activities, allows to identify participation in formal employment from 26.26% in León and 41.09% in Chinandega according to data from the National Institute of Information Development (INIDE) (2005; 2006; 2007; 2008; 2009; 2010; 2011; 2012; 2013; 2014; 2015; 2016; 2017; 2018).The evolution of these variables is increasing except for the downward inflection in 2018 that affected the INSS employees in the west of the country and the balance of the loan portfolio to the agricultural sector. The econometric estimation through Ordinary Least Squares generated as a result that the variable that contributes the most to formal employment in the west of the country is the balance of the agricultural loan portfolio in millions of córdobas, so in the case of these departments the change called by Sunkel (1971) as the solution to the problems of underdevelopment "the transformation of societies from the modernization of their productive systems" is not yet carried out